VanEck Files For First US Spot BNB ETF

VanEck, a prominent asset manager, has taken a significant step in the digital asset landscape by filing a registration statement with the Securities and Exchange Commission (SEC) on May 2. The filing aims to launch a BNB exchange-traded fund (ETF), marking the first known attempt to bring a spot BNB ETF to the US market. If approved, the fund would be listed on an unspecified national exchange under a yet-to-be-disclosed ticker symbol.

This application is part of VanEck's ongoing efforts to broaden access to digital assets through traditional investment vehicles. It comes roughly a month after the asset manager established a legal entity for the BNB ETF in Delaware. The ETF’s objective, as outlined in the preliminary prospectus, is to reflect the price of BNB, minus operational expenses. The fund will hold actual BNB tokens in custody, with values derived from prices on the top five trading platforms. MarketVector Indexes will calculate the index based on those platform prices.

One notable aspect of the filing is the potential for the ETF to participate in staking, subject to regulatory approval. Under this framework, the fund could earn additional BNB through trusted staking providers, possibly including VanEck affiliates. However, staking rewards would be treated as income for the trust. The ETF will not claim any forked assets, airdrops, or other incidental rights that may arise.

The ETF will issue and redeem shares only in large blocks, referred to as “Baskets,” to authorized financial firms, using either cash or in-kind transfers of BNB. Retail investors will be able to trade shares on the secondary market, where prices may fluctuate based on demand and the value of the underlying assets. The filing noted that the trust is not registered under the Investment Company Act of 1940 and is not considered a commodity pool, placing it outside the CFTC’s regulatory scope. It is also not an investment adviser under the Advisers Act.

Seed capital for the ETF has already been provided, with a private investor initially purchasing “Seed Shares” and later exchanging them for “Seed Creation Baskets” of ETF shares, priced according to the index value of BNB at the time. VanEck cautioned that the ETF is speculative and could carry high risks, including the possibility of total loss due to BNB’s volatile nature. Additionally, the shares will not be insured by the FDIC or any other government agency.

This move by VanEck signifies a growing interest in bringing more digital assets into the mainstream investment landscape. The approval of a BNB ETF would provide investors with a regulated and accessible way to gain exposure to BNB, potentially increasing its adoption and integration into traditional financial markets. However, the regulatory hurdles and the volatile nature of digital assets pose significant challenges that VanEck and other asset managers must navigate.