Crypto Chaos: ETFs Go Blockchain! 🤯

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One gathers the American financial establishment is having a bit of a wobble. VanEck, a firm of some substance (apparently controlling, as they put it, a respectable $132.9 billion – one assumes in perfectly ordinary, non-digital dollars as of June 30th, 2025), recently deigned to darken the doorstep of the U.S. Securities and Exchange Commission’s Crypto Task Force. The object? To explain, one suspects with a weary sigh, exactly how one might possibly shoehorn these… *digital fripperies*…into something resembling a regulated fund. 🙄

They arrived, naturally, with a pre-approved agenda and supporting materials. One can picture the dreary Powerpoint presentations. The meeting, so the press release informs us, revolved around the profoundly unsettling notion of funds actually *existing* on a blockchain. The implications for issuers, investor protections, and the very notion of “market structure” are, naturally, causing palpitations amongst the sensible sorts.

A Token Gesture?

The discussion, apparently, included the tokenization of ETFs – which sounds alarmingly like a magician’s trick – and what it means for the poor souls responsible when these tokens inevitably wobble. VanEck, in its infinite wisdom, inquired as to how existing rules might apply when perfectly good fund shares are transformed into… blockchain tokens. One shudders to think. 👻

Liquid staking tokens also received the once-over, prompting VanEck to seek guidance on whether the SEC’s proposed (and likely overly complicated) Generic Listing Standards apply to this latest folly. How exchanges and issuers should manage the crippling liquidity risk inherent in staking within ETFs was also, one assumes, a topic for much hand-wringing and despair.

The Grand Design (or Lack Thereof)

But VanEck didn’t stop there. No, they bravely ventured into larger, more terrifying issues: DeFi platforms, tokenized securities, and, heaven forfend, ICOs! The Advisers Act Custody Rule, they suggested, is looking rather outdated given the way digital assets are being…stored. One imagines dusty legal tomes being frantically consulted.

They even highlighted Multi-Party Computation (MPC) – a phrase designed to induce immediate boredom – as a practical tool for safeguarding private keys. The SEC is urged to consider how *technology* might be regulated. The sheer audacity!

The Players

Present at this meticulously orchestrated encounter were Wyatt Lonergan (General Partner – one presumes suitably flanked by assistants), Kyle F. DaCruz (Director of Digital Assets Product – a title that requires lengthy explanation), Matthew Sigel (Head of Digital Assets Research – researching what exactly is a matter of conjecture), Jonathan R. Simon (General Counsel – bracing for impact), and Matthew A. Babinsky (Associate General Counsel – equally braced). A formidable cohort, no doubt. 💪

This little pow-wow is, so we are informed, merely one of many as the SEC stumbles its way through the digital wilderness. Any guidance or rule changes that materialise will, of course, determine how fund managers contrive to list these unfortunate tokenized ETFs. One anticipates a spectacular mess.

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2025-09-26 10:14