BlackRock files for spot bitcoin ETF, with Coinbase as a crypto custodian

Asset management giant BlackRock took the first steps Thursday to launch a spot bitcoin exchange-traded fund, which has long been a point of contention between crypto advocates and federal regulators.

The firm filed an application with the U.S. Securities and Exchange Commission to launch the iShares Bitcoin Trust. If approved, the ETF would allow easy access for investors to get exposure to crypto in a product from one of Wall Street’s largest companies.

“The Shares are intended to constitute a simple means of making an investment similar to an investment in bitcoin rather than by acquiring, holding and trading bitcoin directly on a peer-to-peer or other basis or via a digital asset exchange,” the filing said.

The SEC has so far resisted allowing the launch of a spot bitcoin ETF in the U.S. The regulator is currently in a legal battle with Grayscale over whether the firm will be allowed to convert its Grayscale Bitcoin Trust into an ETF. A decision in that case is expected later this year.

Several other firms have filed and later pulled applications to launch spot bitcoin funds. If the SEC relents, there could be a flood of those products on the market.

ETFs typically take months to launch after an initial filing, if they ever begin trading. The proposed BlackRock fund will likely face heavy resistance from the SEC, and the filing could be pulled before an ETF is ever launched, said Aisha Hunt, principal at asset management law firm Kelley Hunt & Charles.

BlackRock’s move comes during a time when crypto prices remain well below their all-time highs and the industry faces increasing scrutiny in Washington, D.C.

The SEC recently sued Coinbase and Binance for allegedly running unregistered securities exchanges. The SEC also accused Binance of commingling customer funds with its own.

Coinbase is listed as the bitcoin custodian for the…