SEC Launches Investigation into BlackRock: Is the Future of Their ETF in Jeopardy?
In Brief
BlackRock and MSCI are under investigation due to their involvement with China-related investments. A congressional committee in the U.S. is looking into their activities as they are suspected of enabling investments in various Chinese firms that have been blacklisted.
Earlier this June, BlackRock officially submitted an application for a spot in the Bitcoin exchange-traded fund (ETF). However, with the SEC now investigating the asset management firm, uncertainties loom over the viability of this crypto ETF effort.
Both BlackRock and MSCI, headquartered in New York City, have come under fire for their associations with China. The U.S. congressional committee is examining these firms since they've allegedly facilitated investments in some Chinese companies that have been blacklisted.
As stated in the letters According to a statement from the House of Representatives Select Committee on the Chinese Communist Party, BlackRock and MSCI have helped channel American investments into companies that the U.S. accuses of supporting the Chinese military or violating human rights. As of the latest report, BlackRock's stock has slipped by 0.89%.
In a statement made on August 2, BlackRock assured, 'In all our investments in China and across global markets, we adhere to all relevant U.S. government regulations. We will maintain our dialogue with the Select Committee regarding the raised concerns.' But with the SEC's probe into BlackRock's activities, the future of the ETF initiative remains uncertain.
In June, BlackRock, along with several U.S. banking institutions, began stepping into the world of accumulating digital assets. Typically, banks tread cautiously when it comes to digital currencies, yet this time they went ahead and acquired unprecedented amounts of crypto. Notably, BlackRock reportedly invested over $200 million in Bitcoin and other cryptocurrencies and was speculated to be gearing up to launch a crypto ETF.
In that same month, a light was shed on BlackRock recruiter Serge Varlay, who was secretly filmed by an undercover journalist from OMG News, shared stating that the firm 'purchases' political influence and dictates actions to them. This revelation surfaced just as BlackRock applied for a Bitcoin ETF and the digital asset marketplace, EDX Markets, officially launched. It’s worth mentioning that during this timeframe, both Binance and Coinbase, the two largest crypto exchanges, found themselves under the SEC’s scrutiny.
Nevertheless, with the SEC’s ongoing investigation into BlackRock, it's unclear whether the proposed crypto ETF will be viable.
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