Blackstone CEO says Ethereum ETF could still be launched even if ether is designated as a security

BlackRock CEO Larry Fink said the company is still confident in launching an Ethereum ETF even if the U.S. Securities and Exchange Commission (SEC) declares Ethereum a security.
Earlier this month, reports emerged that the SEC was moving forward with efforts to classify Ethereum’s native asset, ETH, as a security. The qualitative impact of this remains a topic of speculation in the crypto community, particularly as it relates to the impact on applications for spot-based Ethereum ETFs.
However, Fink, CEO of Blackstone Group, the world’s largest asset management company, seems convinced that characterizing ETH as a security will not prevent the company from launching an Ethereum-based ETF.
Blackstone is one of more than seven fund managers seeking to launch products based on Ethereum following the huge success of its Bitcoin ETF.
Fink shared his thoughts on the SEC's rumored move in a recent interview with Fox Business.
While unwilling to comment on the matter more broadly, Fink told Fox reporter Charles Gasparino that characterizing ETH as a “security” would not do “a lot of harm” to the prospects for an Ethereum-based ETF.
When further asked whether an ETF could be launched if ETH was characterized as a security, Larry Fink replied: “I think so, yes.”
ETFs also hold securities
Larry Fink’s recent comments should come as no surprise to investors familiar with securities regulations. Under the U.S. Securities Act, ETFs can hold stocks, bonds and other securities permitted by the SEC. Therefore, fund managers could still offer Ethereum-based ETFs if they receive SEC approval.
However, the implications of this designation for Ethereum and other projects that could potentially be designated as securities pose a significant problem for the crypto industry.
This characterization would likely require each public blockchain’s corresponding foundation to play much the same role as a public company, including filing annual financial reports and other similar obligations.
The crypto industry has fiercely fought this stance, as evidenced by Ripple’s ongoing lawsuit against the SEC.
Meanwhile, May marks the deadline for the SEC to announce its decision on the pending spot Ethereum ETF application.
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