BlackRock Choses Coinbase Custody for Spot-Bitcoin ETF, SEC Lawsuit Ending Soon?

Hours ago financial behemoth BlackRock applied for a spot-Bitcoin ETF taking the crypto world by a huge surprise as the filing comes at a time of massive regulatory crackdown in the United States.

The interesting thing about the filing is that BlackRock has chosen Coinbase as the custodial services provider. Yes, it’s the same Coinbase against whom the US SEC filed a lawsuit recently for violating custody rules, among other charges. If the SEC were to approve the BlackRock filing, it could also mean a fast settlement of the lawsuit.

Crypto market experts have weighed in their opinion on the matter. Popular crypto analyst WhaleWire explains: “With BlackRock’s Spot Bitcoin ETF application, they say they will custody with Coinbase exchange. CoinBase is a SEC noncompliance company, so like every other Bitcoin ETF, this has a 99% chance of being rejected. ETFs are also such a powerful way of manipulating prices (down), so that’s actually a good thing for bulls”.

Market analyst and expert Will Clemente calls it “Hilarious”. He adds that the dots don’t join considering the fact that the SEC sued Coinbase even after approving its IPO in 2021. And amid the current lawsuit against Coinbase, BlackRock comes naming the exchange as its custodial partner. Note that this is the same BlackRock which once believed that Bitcoin is an “index of money laundering”.

Will the US SEC Favor BlackRock?

But why would BlackRock make a move at a time when the US SEC has been going hammer and tongs after top crypto players? Crypto market experts share their views on the current developments.

Some market players say that if BlackRock receives a go-ahead from the SEC, this would mean a clear case of bias. It means that in order to favor the big players, the SEC has been squashing small players out of the industry.

We know for a fact that Graysclae Investments has been aggressively pushing to convert the Grayscale Bitcoin Trust into a spot Bitcoin ETF. If the SEC gives a nod to the BlackRock filing, there’s a possibility that Grayscale might slap a huge lawsuit against the securities regulator. Will Clemente writes:

If Blackrock’s spot ETF application gets approved, it is undeniable that Operation Chokepoint 2.0 was orchestrated to drive out crypto native companies and bring in large traditional firms that are buddy-buddy with the US govt to try and control Bitcoin/crypto.

Founder of Custodian Bank Caitlin Long is also conducting a pool on the recent BlackRock developments.