Franklin Templeton takes initial step for spot Ethereum ETF with new SEC filing

Investment firm Franklin Templeton on Monday took an initial step for a spot Ethereum ETH +5.47% ETF, joining other asset managers already seeking approval from the Securities and Exchange Commission.

The firm filed an S-1 registration statement for the Franklin Ethereum ETF and said the fund will generally reflect the price of ether. Coinbase Custody Trust Company and the Bank of New York Mellon would be the custodians for ether and cash holdings, respectively.

The shares would be listed and traded on the Cboe BZX Exchange, Inc., according to the filing.

“The Shares are intended to offer a convenient means of making an investment similar to an investment in ether relative to acquiring, holding and trading ether directly on a peer-to-peer or other basis or via a digital asset platform,” the filing read. “The Shares have been designed to remove obstacles associated with the complexities and operational burdens involved in a direct investment in ether by providing an investment with a value that reflects the price of the ether owned by the Fund at such time, less the Funds expenses.”

“The Authorized Participants will deliver only cash to create Shares and will receive only cash when redeeming Shares,” the filing read.

Others look to launch a spot Ethereum ETF

Cathie Wood's Ark Invest and 21Shares, Grayscale Investments and BlackRock have all filed for a spot Ethereum ETF over the last few months.

Ark and 21Shares filed an amended registration statement for their prospective spot Ethereum ETF last week and included a possible new staking component. Franklin Templeton's filing on Monday includes staking as well.

“The Sponsor may, from time to time, stake a portion of the Funds assets through one or more trusted Staking Providers, which may include an affiliate of the Sponsor. In consideration for any staking activity in which the Fund may engage, the Fund would receive certain staking rewards of ether tokens, which may be treated as income to the Fund,” according to Franklin Templeton's filing.

The SEC has delayed decisions on applications for other Ethereum ETFs, and experts are mixed on whether such a product is likely to obtain approval this year.