Ben Strack

Fund group Hashdex has entered the spot bitcoin ETF race from a different angle — adding to the list of such proposals in front of the US Securities and Exchange Commission, but with a twist.&nbsp;&nbsp;



The Brazil-based asset manager aims to morph the Hashdex Bitcoin Futures ETF (DEFI) into a fund that holds bitcoin directly, according to a Friday filing by NYSE — the stock exchange that would list the proposed fund.&nbsp;



The new fund would hold a combination of bitcoin futures contracts, spot bitcoin, and cash — a mix that “could significantly mitigate the risk of market manipulation while still providing the market with a regulated product that tracks the actual price of bitcoin,” NYSE states in the <a href="https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/rule-filings/filings/2023/SR-NYSEArca-2023-58.pdf">filing</a>.&nbsp;



The Hashdex Bitcoin ETF expects to purchase and sell physical bitcoin via the Chicago Mercantile Exchange’s (CME) Exchange for Physical (EFP) Transactions, which the filing notes are subject to CME’s market surveillance.



<a href="https://www.cmegroup.com/education/articles-and-reports/bitcoin-futures-exchange-for-physical-transactions.html#">EFP</a> transactions are “privately negotiated trades between two counterparties allowing them to simultaneously transfer a futures position for an equivalent spot market position or vice versa,” according to the CME website.&nbsp;



Bryan Armour, director of passive strategies research for Morningstar, said the filing is “the strongest test of the precedent” set by the <a href="https://blockworks.co/tag/sec">SEC</a> when it approved ETFs holding bitcoin futures, but not those that hold bitcoin directly.



“The crux of the matter is whether obtaining bitcoin exposure by exchanging futures for spot bitcoin on the CME adequately addressed the SEC’s concerns about the spot bitcoin market,” Armour explained. “Using Exchange for Physical to bypass buying bitcoin on a crypto exchange feels a bit like a procedural technicality, but technicalities are exactly what the SEC has rewarded so far for crypto ETFs.”



Nate Geraci, president of The ETF Store, noted that the existing surveillance sharing agreement between NYSE and CME — put in place for <a href="https://blockworks.co/news/first-bitcoin-futures-etf-nears-1b-on-first-day-of-trading">the ProShares Bitcoin Strategy ETF (BITO)</a> — should “theoretically suffice” in addressing SEC concerns around monitoring fraud and manipulation.



“This is a very savvy move by Hashdex and puts the SEC in a tough spot given the agency has already blessed the CME bitcoin futures market,” Geraci said. “I can absolutely envision a scenario where this is approved prior to other spot bitcoin ETF filings — though there remain several variables here, including <a href="https://blockworks.co/news/gbtc-grayscale-sec">the outcome of Grayscale’s lawsuit</a>.”



Hashdex believes that converting an existing product, rather than submitting a new filing with the SEC, might position it as the first US ETF to directly hold bitcoin, a source familiar with the matter told Blockworks.



Not all agree.



“The fact that it&#8217;s a live product shouldn&#8217;t give Hashdex an advantage here, I don&#8217;t think,” Bloomberg Intelligence analyst James Seyffart said. “It still has to go through the <a href="https://www.sec.gov/files/form19b-4.pdf">19b-4</a> process like everyone else.”



<a href="https://blockworks.co/news/sec-bitcoin-etf-september">Like other planned bitcoin ETFs the SEC is considering</a>, the regulator has up to 240 days to rule on the proposal.



A spokesperson for Hashdex declined to comment.



<h2 class="wp-block-heading">Not relying on an agreement with Coinbase</h2>



Hashdex’s DEFI — <a href="https://blockworks.co/news/teucrium-bitcoin-futures-etf-now-carries-hashdex-brand">originally proposed as the Teucrium Bitcoin Futures Fund</a> — launched in September 2022.&nbsp;



In an effort “to avoid any exposure to potential manipulation from unregulated exchanges,” the document says, the proposed fund’s net asset value would be calculated using a spot bitcoin price derived from the prices of bitcoin futures traded on the CME.



This distinction differentiates it from other bitcoin ETF filings submitted in recent months.



Asset management giant BlackRock set itself apart from previous bitcoin ETF filings by noting in a June proposal that <a href="https://blockworks.co/news/blackrock-bitwise-bitcoin-etf-filings">Nasdaq was willing to enter into a surveillance-sharing agreement</a> (SSA) with “an operator of a US-based spot trading platform for bitcoin” — later naming the platform as Coinbase.



The listing exchanges working with other fund groups on bitcoin ETF proposals, such as Cboe, <a href="https://blockworks.co/news/cboe-reached-agreement-coinbase">added similar language to their own applications</a>.



Samir Kerbage, head of products at Hashdex, wrote in a Friday blog <a href="https://hashdex.com/en-US/insights/the-us-is-inching-closer-to-a-spot-bitcoin-etf-does-it-matter">post</a> that the SEC continues to reject spot bitcoin ETF proposals based on concerns of potential market manipulation.&nbsp;



“BlackRock and most other spot bitcoin ETF applicants believe a surveillance-sharing agreement with the exchange where <a href="https://blockworks.co/price/btc">BTC</a> trades solves this, but there has been no evidence that this addresses the SEC’s concerns,” Kerbage added.



Geraci called the filing’s reference to Coinbase as “unregulated” a “nice competitive move” in a <a href="https://twitter.com/NateGeraci/status/1695198446796382692">tweet</a>. The SEC <a href="https://blockworks.co/news/sec-sues-coinbase">sued Coinbase in June for allegedly operating as an unregistered exchange</a> — claims the company has denied.&nbsp;&nbsp;



“I think what Hashdex has proposed is rather novel and potentially goes around some of the SEC&#8217;s concerns with the bitcoin spot markets,” Seyffart told Blockworks. “[But] I personally think that having a Coinbase SSA should not hurt, and that it can [and] should only help.”



Hasdex’s move is not exactly unexpected.&nbsp;&nbsp;



Bruno Sousa, head of Hashdex’s US business, <a href="https://blockworks.co/news/hashdex-btc-etf-feasible-2023">told Blockworks in March</a> that the company would be ready to convert its bitcoin futures ETF to a spot product.



Sousa pointed out that while other US bitcoin futures ETFs were filed under the Investment Company Act of 1940, Hashdex&#8217;s fund was submitted under the Securities Act of 1933. This structure potentially allows for direct bitcoin holding, pending regulatory approval.



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How Hashdex’s planned bitcoin ETF differs from competing proposals

Brian Brooks, a former regulator, has joined the board of directors at Hashdex, a crypto asset manager. This appointment represents another instance of a former regulator becoming an adviser to a crypto firm.



Brian Brooks has previously held similar positions after his tenure as the acting US comptroller of the currency from May 2020 to January 2021. As an independent bureau of the US Department of Treasury, the Office of the Comptroller of the Currency (OCC) ensures national banks are complying with various laws.&nbsp;&nbsp;&nbsp;



<a href="https://blockworks.co/news/brian-brooks-resigns-as-binanceus-ceo">Brooks was the CEO of Binance.US</a> for several months in 2021 before becoming the CEO of bitcoin mining company Bitfury that October. He later <a href="https://blockworks.co/news/bitfury-ceo-brian-brooks-joins-board-of-voyager-digital">joined the board of Voyager Digital</a> in December 2021 as an independent, non-executive director.



Brooks said in a statement at the time of joining Voyager that he would help the firm in “building out the platform for global scale and navigating the regulatory environment in the US and beyond.” But <a href="https://blockworks.co/news/voyager-files-for-bankruptcy-days-after-freezing-withdrawals">the company filed for bankruptcy</a> roughly seven months later.



Now, as a strategic adviser to Hashdex, Brooks is set to sit on the council representing Valor Capital Group — an investor in Hashdex for which Brooks is a partner. He will help the firm bridge the gap between the crypto ecosystem and traditional finance, the company said Thursday.&nbsp;



Hashdex CEO Marcelo Sampaio added in a statement that “his proven ability to push forward thoughtful, innovation-driven public policy is much needed at this time.”



The Brazil-based firm <a href="https://blockworks.co/news/hashdex-btc-etf-feasible-2023">offers a bitcoin futures ETF in the US</a> and <a href="https://blockworks.co/news/hashdex-expands-offerings-to-eu-in-latest-crypto-etp">expanded to the European market for the first time in April</a>.&nbsp;



<h2 class="wp-block-heading">Ex-SEC and CFTC leaders, former lawmakers now advising</h2>



Other crypto firms have filled advisory and executive roles with former regulators in the absence of a comprehensive crypto framework in the US.&nbsp;&nbsp;



Read more: <a href="https://blockworks.co/news/america-lagging-crypto-regulation">Is the World Leaving America Behind on Crypto Regulation?</a>



Jay Clayton, who was chair of the SEC from May 2017 to December 2020, joined the advisory board of crypto custody provider Fireblocks in August 2021.&nbsp;



He was brought aboard to “navigate evolving market and regulatory dynamics affecting the development and deployment of solutions for the emerging digital asset infrastructure,” Fireblocks said in a news release at the time.&nbsp;



Clayton also became an adviser to crypto venture capital firm Electric Capital in August 2022. Kevin Warsh, a member of the Federal Reserve Board of Governors between 2006 and 2011, joined the company as an adviser at the same time.&nbsp;



The former SEC chair is <a href="https://blockworks.co/news/sec-conflicts-of-interest-case">among those targeted by Empower Oversight</a> for allegedly having possible ties to crypto while regulating the space. Clayton <a href="https://blockworks.co/news/former-sec-chairman-turned-crypto-advisor-defends-move-to-private-sector">told Blockworks last year</a> he didn’t expect to be involved with crypto companies after he left the commission.



Clayton said during an interview with CNBC in April that <a href="https://blockworks.co/news/jay-clayton-ether-sec-security">crypto tokens deemed securities today might not be in the future</a> — comments seeming to further complicate <a href="https://blockworks.co/news/brian-armstrong-sec-cftc-war">a turf war of sorts</a> between the SEC and the Commodity and Futures Trading Commission (CFTC).&nbsp;



Ex-CFTC officials have also entered crypto advisory roles in recent years.&nbsp;



Chris Giancarlo, CFTC chair from August 2017 to July 2019, became a strategic adviser to crypto investment firm CoinFund in January 2022.&nbsp;



He is also in advisory and director roles at Nomura, Digital Asset, the Chamber of Digital Commerce and Baton Systems, according to his LinkedIn <a href="https://www.linkedin.com/in/j-christopher-giancarlo-77257111/details/experience/">profile</a>.&nbsp;



Former CFTC Commissioner Dawn Stump has been a strategic adviser for Solidus Labs since last August — joining Giancarlo and Brooks, as well as former SEC Commissioner Troy Paredes; ex-LabCFTC Director Daniel Gorfine; and Clara Chiu, a former innovation and licensing leader at the Hong Kong Securities and Futures Commission.



More recently, Heath Tarbert — a former acting under secretary for international affairs for the US Treasury Department and ex-chair of the CFTC — became chief legal officer and head of corporate affairs at stablecoin issuer Circle.&nbsp;



Former lawmakers have also gotten involved with crypto companies — including for Binance and Coinbase, exchanges <a href="https://blockworks.co/news/coinbase-binance-suits-different">sued by the SEC last month</a>.&nbsp;



Binance said last September <a href="https://blockworks.co/news/former-us-senator-will-chair-new-binance-global-advisory-board">its new advisory board would be led by Max Baucus</a>, an ex-Democratic senator from Montana who was US ambassador to China.



Coinbase tapped former Senator Patrick Toomey, R-Pa., for <a href="https://blockworks.co/news/coinbase-creates-advisory-board">its newly formed global advisory council</a>, as well as Tim Ryan and Sean Patrick Maloney — ex-Democratic US representatives for Ohio and New York, respectively.  



2020 Democratic presidential candidate Andrew Yang <a href="https://blockworks.co/news/latest-in-crypto-hiring-andrew-yang-to-advise-web3-focused-firm">began advising Web3 data startup Pool Data</a> last year.



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These former US regulators and lawmakers are advising crypto startups

Brazilian asset manager Hashdex will be ready to convert its bitcoin futures ETF to a spot product, a company executive said, considering regulatory clarity around such a fund is coming.&nbsp;&nbsp;&nbsp;



It’s just a matter of time. New legislation or a court ruling are both possible options.&nbsp;



Bruno Sousa, head of Hashdex’s US business, told Blockwork his company’s product has an advantage over other competing products on the market when it comes to making the switch. 



The Hashdex Bitcoin Futures ETF (DEFI), which the company launched <a href="https://blockworks.co/news/teucrium-bitcoin-futures-etf-now-carries-hashdex-brand">with the help of fund issuer Teucrium</a> in September 2022, was filed under the Securities Act of 1933 (‘33 Act). Other futures ETFs were filed under the Investment Company Act of 1940 (‘40 Act).&nbsp;&nbsp;&nbsp;



“The concept was that to hold bitcoin, the ‘33 Act structure is a proper structure,” Sousa said in an interview. “The ‘40 Act can only have securities; it can never hold bitcoin itself…so those ‘40 Act ETFs using bitcoin futures don’t have the structure to take on bitcoin directly at any point.”



The ’33 Act structure could well be easier to convert from holding <a href="https://blockworks.co/price/btc">BTC</a> futures to bitcoins than a ’40 Act fund might be, should that conversion process be approved by the SEC, according to Lara Crigger, editor-in-chief at data firm VettaFi.



“That’s because ’40 Act funds have very strict rules around the diversification of holdings and making distributions; as a result, they can’t invest in ‘riskier’ assets, like commodities,” she told Blockworks in an email. “33 Act funds, however, can take the form of grantor trusts, which hold physical commodities … and commodities pools, which hold futures.”&nbsp;



<h2 class="wp-block-heading">Who could be first?</h2>



Sousa’s comments come as the prospect for spot bitcoin ETFs have once again gained prominence.



Grayscale Investments is enveloped in a case against the SEC after the regulator last year declined the proposed conversion of the firm’s flagship Bitcoin Trust (GBTC) into an ETF. GBTC shares are now offered through a private placement exempt from registration under the ‘33 Act. They’re initially only available to accredited investors as a result.&nbsp;



During oral arguments in the DC Circuit Court of Appeals earlier this month, <a href="https://blockworks.co/news/grayscale-appears-to-win-opening-sec">judges grilled the SEC</a> on why the regulator approved bitcoin futures exchange-traded products (ETPs) and not the GBTC conversion.



Industry watchers previously told Blockworks, however, that a <a href="https://blockworks.co/news/grayscale-win-over-sec-might-not-change-much-industry-watchers-say">favorable Grayscale ruling might not mean much</a>, as the SEC might choose to deny GBTC’s conversion, and other spot bitcoin ETF applications, for a different reason.



Hashdex launched the world’s first crypto index ETF in February 2021 on the Bermuda Stock Exchange. Now, Sousa argued DEFI has the most “straightforward process” to gaining spot bitcoin ETF approval when the time comes.



“Our conversion is not really a conversion; it’s just a change in investment policy — a very simple procedure,” he said. “And we will re-file whenever there’s a new fact that can lead us to the idea that the SEC might position itself differently.”



The first bitcoin futures ETF in the US, the ProShares Bitcoin Strategy ETF (BITO), hit the market in October 2021. It was filed under the ‘40 Act structure.



Valkyrie Investments, which launched a bitcoin futures ETF also filed under the ‘40 Act in that month, gained approval for a ‘33 Act <a href="https://blockworks.co/news/another-bitcoin-futures-etf-approved-by-sec-with-no-spot-product-in-sight">bitcoin futures ETF</a> last year.



A Valkyrie spokesperson did not immediately return a request for comment on its plans for the product.&nbsp;



Sumit Roy, a senior analyst at ETF.com, said other issuers could just file for a separate spot bitcoin ETF rather than convert their existing futures-based funds.



“If and when the SEC finally allows a spot bitcoin ETF to come to market, I think — and I would hope — that several such funds would be approved at the same time, and that fund structure wouldn&#8217;t be a deciding factor,” he said.



Keep reading for more excerpts from Blockworks’ interview with Sousa. 



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Blockworks: Hashdex’s bitcoin futures ETF has less than $2 million assets under management, compared to BITO, for example, which has about $960 million. Why has DEFI had such little interest?



Sousa: Last year&#8217;s bear market was a challenging environment for crypto ETFs globally, but bitcoin is clearly on its path to recovery.



We are anticipating more demand from investors as the macro environment shifts and the global banking crisis shines a light on bitcoin’s benefits.



Blockworks: What needs to happen before a spot bitcoin ETF is approved?



Sousa: A lot of the background issue here has been the dispute between the SEC and the CFTC. We’re seeing the commissioner of the CFTC saying that ether is a commodity, and we’re seeing the SEC saying time and time again — and giving indications — that this is a security.



The parallel discussion … is once you have the federal legislation determining who regulates crypto exchanges — we believe that will be the CFTC — and the CFTC rolls out rules for crypto exchanges, then the argument for unregulated markets or market manipulation goes under.



After that, essentially the SEC would be in a position to approve.&nbsp;



Blockworks: When will that be?&nbsp;



Sousa: It depends…but it’s feasible that it can happen this year if the world doesn’t blow up with everything that’s happening, and the folks in DC, New York and other places don’t have to focus on saving the current financial system.



It will eventually come out. It’s closer and closer.



This interview was edited for clarity and brevity.



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Hashdex US Head: BTC ETF ‘Feasible’ in 2023 if the ‘World Doesn’t Blow Up’

Sebastian Sinclair

<div id="highlights-block_626ac81083669" class="highlights">
 <ul>
 <li>The firm&#8217;s Nasdaq Crypto Index Europe ETP will trade on the SIX Swiss Exchange</li>
 <li>The product which will track the performance of bitcoin, cardano and ether, among others</li>
 </ul>
 
</div>



Crypto asset manager Hashdex has branched into the European market for the first time with its latest ETP that tracks an underlying basket of cryptocurrencies. 



The Brazillian firm&#8217;s Nasdaq Crypto Index Europe ETP (exchange-traded product) will trade on the SIX Swiss Exchange under the ticker symbol SIX: HASH SW, beginning May 2, according to a Thursday <a href="https://www.globenewswire.com/news-release/2022/04/28/2431733/0/en/Hashdex-Announces-Launch-of-the-Hashdex-Nasdaq-Crypto-Index-Europe-ETP.html" target="_blank" rel="noreferrer noopener">statement</a>. 



It marks the manager&#8217;s first product available for European investors, a spokesperson confirmed to Blockworks. &#8220;The launch of HASH SW is a natural next step in Hashdex’s commitment to serving the region,&#8221; the spokesperson added.



Asset managers <a href="https://cms.blockworks.co/21shares-combines-bitcoin-and-gold-in-newest-etp/" target="_blank" rel="noreferrer noopener">continue</a> to roll out crypto-related exchange products and funds despite stalled upward market performance in recent months. Some managers are even seeking to launch products that take advantage of the trend reversal — including proposals for <a href="https://cms.blockworks.co/issuers-race-to-launch-a-short-bitcoin-futures-etf/" target="_blank" rel="noreferrer noopener">ETFs that short bitcoin</a>.



Hashdex&#8217;s latest product tracks the performance of Nasdaq&#8217;s Crypto Index Europe (NCIE) which, in turn, tracks the showings of avalanche, bitcoin, cardano, ether, litecoin, polkadot, polygon and solana.



Hashdex and Nasdaq previously co-developed the Nasdaq Crypto Index. The NCIE is an extension of the effective methodology established by the NCI and has been tweaked to conform to eligibility requirements of European exchanges.



Ahead of its first ETP for the European market, Hashdex <a href="https://cms.blockworks.co/brazilian-cryptoasset-manager-poaches-exec-to-lead-european-expansion/" target="_blank" rel="noreferrer noopener">recently hired</a> its inaugural managing director and head of Europe, Laurent Kssis, in March. 



Kssis was formerly global head of ETPs at Swiss manager 21Shares, where he brought to market more than 25 crypto ETPs across several European regulated exchanges.



&#8220;We believe with this index and subsequently delivering this institutional-grade ETP, we have represented exactly what investors have been demanding by offering a product with diversified exposure that mitigates risk in cryptoassets,&#8221; Kssis said.



In February&nbsp;2021, Hashdex&nbsp;launched the Hashdex Nasdaq Crypto ETF&nbsp;(HDEX), which tracks the Nasdaq Crypto Index on the Bermuda Stock Exchange.&nbsp;The Hashdex Nasdaq Crypto ETF became the&nbsp;world’s first crypto-based ETF&nbsp;and&nbsp;is currently available on the BSX to accredited non-US investors.&nbsp;



Seeking to leverage Hashdex&#8217;s momentum, the first bitcoin futures ETF in the US to gain the SEC&#8217;s blessing under the Securities Act of 1933&nbsp;may be seeking a <a href="https://cms.blockworks.co/teucrium-bitcoin-futures-etf-now-carries-hashdex-brand/" target="_blank" rel="noreferrer noopener">name change</a> from Teucrium Bitcoin Futures Fund to Hashdex Bitcoin Futures ETF.



It&#8217;s unclear what role Hashdex will play, though Bloomberg Intelligence ETF Analyst Eric Balchunas said last week the name change could signal a partnership similar to that between Ark Invest and 21Shares.&nbsp;



In April 2021 Hashdex&nbsp;<a href="https://www.b3.com.br/en_us/news/b3-begins-trading-the-first-hashdex-etf.htm" target="_blank" rel="noreferrer noopener">launched</a>&nbsp;another version of its flagship fund, the Hashdex Nasdaq Crypto ETF, on Brazil’s B3 exchange. Hashdex followed up by partnering with Nasdaq and Victory Capital in August to&nbsp;<a href="https://www.businesswire.com/news/home/20210804005624/en/Victory-Capital-Launches-Crypto-Index-Fund-for-U.S.-Accredited-Investors">launch</a>&nbsp;a private fund tracking the performance of a basket of USD-traded cryptos available to US accredited investors.



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Hashdex Expands Offerings to Europe With Latest Crypto ETP

<div id="highlights-block_62602e05293fa" class="highlights">
 <ul>
 <li>Hashdex brand could help Teucrium differentiate its product from competitors, Bloomberg Intelligence analyst says</li>
 <li>Industry eyes have been on the fund, which recently gained SEC approval and was filed under the same regulation under which spot bitcoin ETFs are filed</li>
 </ul>
 
</div>



The first bitcoin futures ETF to gain SEC approval under the Securities Act of 1933 — the regulation under which spot bitcoin ETFs are filed — is apparently seeking to change its name.



The proposed Teucrium Bitcoin Futures Fund, which was <a href="https://www.sec.gov/Archives/edgar/data/0001471824/000165495421006095/TeucriumBCFU_S1.htm" target="_blank" rel="noreferrer noopener">first filed</a> last May, was referred to as the Hashdex Bitcoin Futures ETF in a Monday <a href="https://www.sec.gov/Archives/edgar/data/1471824/000165495422005090/bitcoin_s-1.htm" target="_blank" rel="noreferrer noopener">regulatory disclosure</a>.



Hashdex, a Brazil-based asset manager, was not named in the original May 2021 filing. Teucrium Trading remains the sponsor of the fund, the latest document indicates, and the specific role Hashdex will play for this fund is unclear.



A Teucrium spokesperson declined to comment beyond the filing. A representative for Hashdex did not immediately return a request for comment.



Bloomberg Intelligence ETF Analyst Eric Balchunas flagged the name change in <a href="https://twitter.com/EricBalchunas/status/1516134901493424139" target="_blank" rel="noreferrer noopener">a Twitter post</a>, noting that it could signal a partnership similar to one between Ark Invest and 21Shares. 



The two firms <a href="https://cms.blockworks.co/ark-files-for-bitcoin-etf/" target="_blank" rel="noreferrer noopener">filed to launch</a> the ARK 21Shares Bitcoin ETF last year. While 21Shares, the largest issuer of crypto exchange-traded products, is listed as the sponsor of the trust, the regulatory disclosure states that Ark “provides assistance in the marketing of the shares.”



The Ark brand, associated with investments in disruptive innovation, carries weight among many investors in the US despite year-to-date negative returns across its products. The firm has nine ETFs trading in the US with combined assets under management of roughly $20 billion.



This appears to be the first collaboration between Teucrium and Hashdex. Bloomberg Intelligence ETF Analyst James Seyffart said the arrangement seems to benefit both firms.



“Hashdex brings a crypto brand name to the product for Teucrium — so might help them differentiate a little bit,” Seyffart told Blockworks. “Also it allows Hashdex to get a foot in the door of the US ETF ecosystem.”



As for branding, Hashdex has made headlines in recent months for launching <a href="https://cms.blockworks.co/brazil-based-hashdex-expects-to-launch-first-defi-etf-next-month/" target="_blank" rel="noreferrer noopener">decentralized finance (DeFi)</a> and <a href="https://cms.blockworks.co/hashdex-set-to-launch-web3-etf-in-brazil-on-march-30/" target="_blank" rel="noreferrer noopener">Web3</a> ETFs on the Brazilian stock exchange B3. The company reports having 250,000 investors in its products globally. 



The SEC’s <a href="https://cms.blockworks.co/sec-approves-bitcoin-futures-etf-filed-under-the-33-act/" target="_blank" rel="noreferrer noopener">approval of Teucrium’s bitcoin futures ETF</a> gained attention among industry watchers, as some viewed the agency’s decision as a step toward greenlighting a spot bitcoin ETF. Other ETFs investing in bitcoin futures contracts, which launched last year, were filed under the Investment Company Act of 1940, which has additional investor protections. 



Grayscale Investments CEO Michael Sonnenshein said the Teucrium approval “significantly weakened” the SEC’s argument against a spot bitcoin ETF. Dave Abner, head of business development at crypto custodian Gemini, dubbed the Teucrium approval a “precursor” to regulators allowing such a product.



Other industry executives still believe a spot bitcoin ETF <a href="https://cms.blockworks.co/crypto-execs-read-the-tea-leaves-on-spot-bitcoin-etf-approval/" target="_blank" rel="noreferrer noopener">won’t launch until next year</a>, at the earliest.



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Teucrium Bitcoin Futures ETF Now Carries Hashdex Brand

<div id="highlights-block_625447e2895f1" class="highlights">
 <ul>
 <li>While 86% of financial pros plan to boost their crypto allocations in the next year, none plan to decrease</li>
 <li>Advisers, on average, report wanting to allocate 6% of a client’s total portfolio to crypto</li>
 </ul>
 
</div>



Nearly nine of 10 financial advisers investing in crypto expect to increase their allocations over the next year, according to a Nasdaq survey, though the approval of a spot crypto ETF would help speed further adoption.



The survey published Monday gathered input from 500 advisers who are currently or considering allocating to crypto. While 86% plan to boost their allocations to the space in the next 12 months, none plan to decrease over that span.



“This is significant because it shows that neither advisers nor their clients are feeling buyer’s remorse as a result of their decisions,” Jake Rapaport, Nasdaq’s head of digital asset index research, told Blockworks.



But 72% of advisers would be more likely to invest client assets in crypto if a spot ETF were offered in the United States, the survey found.



The Securities and Exchange Commission has not yet approved a product that invests directly in cryptocurrencies, such as bitcoin, and 31% of respondents said they find it unlikely that such a product will be approved this year.



Bloomberg Intelligence analysts <a href="https://cms.blockworks.co/is-a-change-to-exchange-definition-key-to-bitcoin-etf-approval/" target="_blank" rel="noreferrer noopener">have said</a> they do not expect a spot bitcoin ETF to be approved until mid-2023.



In the meantime, fund groups ProShares, Valkyrie Investments and VanEck last year launched ETFs that primarily invest in bitcoin futures contracts. The SEC <a href="https://cms.blockworks.co/sec-approves-bitcoin-futures-etf-filed-under-the-33-act/" target="_blank" rel="noreferrer noopener">last week approved</a> a bitcoin futures ETF from asset manager Teucrium filed under the Securities Act of 1933 — the regulation under which spot bitcoin ETFs are filed.



Half of the advisers already investing in crypto are allocating to bitcoin futures ETFs, and 28% plan to start using them in the next 12 months, Nasdaq discovered.



<h3 class="wp-block-heading">Who is allocating, and how?</h3>



About a third of registered investment advisers (RIAs) use crypto, compared to 19% of independent broker-dealers (IBDs) and 17% of wirehouse advisers.



Advisers, on average, report wanting to allocate 6% of a client’s total portfolio to crypto.



Roughly 70% would consider using an index fund for broad exposure, followed by sector-specific index funds (57%), actively managed funds (52%), individual digital assets (40%) and high-yield funds (31%).



Despite this, only 10% of advisers say they are very knowledgeable about crypto. Nasdaq partnered with asset manager Hashdex last month to launch a digital assets curriculum for financial professionals.



“There is so much room for educational growth on the subject,” Rapaport said, noting that asset managers, index providers and media publishers can all help narrow the gap. “What’s less surprising is that advisers know what they want, and they largely want access to passive investment products for their clients’ portfolios.”



Nasdaq launched its crypto index in February 2021. It allocated roughly 67% to bitcoin and nearly 30% to ether, as of March 1, as well as allocations of less than 1% to eight other cryptoassets.&nbsp;



“We continue to believe that the Nasdaq Crypto Index simplifies access to the entire asset class by adhering to principles that matter to advisers and investors,” Rapaport said. “We look forward to driving further innovation in crypto to support all types of investors.”



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Nasdaq Survey: Spot Crypto ETF Would Speed Adviser Allocation

<div id="highlights-block_624351c112a26" class="highlights">
 <ul>
 <li>Laurent Kssis, the firm’s new head of Europe, says launching thematic products that offer exposure to the broader crypto market is a major focus</li>
 <li>The hire follows Hashdex’s launch of a DeFi ETF and the approval of an upcoming Web3 offering</li>
 </ul>
 
</div>



Hashdex has poached an executive from competitor 21Shares as the Brazilian cryptoasset manager looks to extend its presence in Europe.



Laurent Kssis, who will serve as a managing director and head of Europe, has joined the ETF issuer in the midst of its product expansion.&nbsp;



<a href="https://www.hashdex.com/en-US/hashdex" target="_blank" rel="noreferrer noopener">Hashdex</a>, which surpassed $1 billion in assets under management last year, launched the world’s first crypto index ETF, the Hashdex Nasdaq Crypto Index ETF, in February 2021.



The firm earlier this month moved to bring <a href="https://cms.blockworks.co/hashdex-set-to-launch-web3-etf-in-brazil-on-march-30/" target="_blank" rel="noreferrer noopener">a Web3-focused ETF</a> to the Brazilian stock exchange B3. Set to begin trading March 30 under the ticker WEB311, the product seeks to replicate the CF Web 3.0 Smart Contract Platforms Index.



The launch of WEB311 will follow Hashdex’s <a href="https://cms.blockworks.co/brazil-based-hashdex-expects-to-launch-first-defi-etf-next-month/" target="_blank" rel="noreferrer noopener">launch of its DeFi ETF</a> (DEFI11), also in Brazil.



Now, Hashdex seeks to replicate its success in Brazil within the European market, Kssis said. The company plans to create ETPs (exchange-traded products) in Switzerland, where it is already established, he added, before launching such offerings across Europe.



“As we build and launch products, we will continue to target innovative investors and help provide them with the exposure they want but are not currently able to capture,” Kssis told Blockworks in an email. “In addition, we will focus on leveraging our research capabilities to further educate the marketplace on crypto innovation and investing.”



Hashdex is looking to differentiate from competitors by focusing on thematic products that offer exposure to the crypto market, rather than individual assets “without much flexibility or diversification,” Kssis noted.



Kssis was formerly a managing director and the global head of ETPs at Swiss issuer 21Shares, which offers nearly two-dozen single-asset ETPs. 21Shares CEO Hany Rashwan <a href="https://cms.blockworks.co/21-shares-expands-crypto-etps/" target="_blank" rel="noreferrer noopener">told Blockworks last month</a> the firm aims to support what it considers to be the top 50 cryptocurrencies by the end of this year.



“I have historically been focused on single assets products, but what Hashdex specializes in is baskets of crypto assets, providing exposure in a safe and simple way,” Kssis said. “Given the evolution of what institutional investors are demanding, we’re fully aligned on how to structure products and help investors capture broad exposure to the market.”



Before 21Shares, Kssis was CEO of Swedish crypto issuer XBT Provider AB, which CoinShares acquired in 2017. There, he oversaw the first European Ether ETP listing, which raised $400 million within weeks of launch.



Hashdex CEO Marcelo Sampaio said in a statement that Kssis’ background — particularly in Switzerland, which he called “the leading venue for listing crypto ETPs” — will help the company accelerate its international reach.&nbsp;



The number of <a href="https://cms.blockworks.co/with-us-bitcoin-etf-in-limbo-crypto-exchange-traded-products-all-the-rage-in-europe/" target="_blank" rel="noreferrer noopener">ETPs trading in Europe</a> continues to grow, while the US Securities and Exchange Commission continues to decline approval for such offerings.



The addition of Kssis is the latest in a string of recent Hashdex hires.



The company in December added Matthew Flood as its head of US business development and Jack Song as the country’s head of corporate communications and chief of staff. The firm said at the time that it planned to leverage its exclusive partnerships with Nasdaq and <a href="https://cms.blockworks.co/victory-capital-launches-crypto-index-fund/" target="_blank" rel="noreferrer noopener">Victory Capital</a> as part of its US expansion and expects to launch US products soon.



Hashdex more recently hired Nicole Dyskant as its global head of legal and compliance.



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Brazilian Cryptoasset Manager Poaches Exec To Lead European Expansion

<div id="highlights-block_6230ad57677fb" class="highlights">
 <ul>
 <li>The fund will allocate to digital assets native to smart contract blockchains such as Ethereum, Cardano and Solana</li>
 <li>Hashdex has more than 250,000 investors in its products globally</li>
 </ul>
 
</div>



Hashdex is set to launch another crypto-related ETF on the Brazilian stock exchange B3, as its latest offering focuses on Web3.



The product, set to begin trading on March 30 under ticker symbol WEB311, seeks to replicate the CF Web 3.0 Smart Contract Platforms Index. Allocating to digital assets native to smart contract blockchains, the index’s largest holdings are ether, cardano and solana, each at roughly 22%.



Other assets in the index include polkadot (19.5%), algorand (8.8%), tezos (3.5%) and cosmos (1.1%).



“The WEB311 ETF not only provides exposure to the smart contract platforms underpinning Web3, but serves as an accessible and unique way to invest in projects that will be the main engine of the internet of the future,” Hashdex CEO Marcelo Sampaio said in a statement.



Hashdex <a href="https://cms.blockworks.co/brazil-based-hashdex-expects-to-launch-first-defi-etf-next-month/" target="_blank" rel="noreferrer noopener">announced in January</a> that it had gained approval to launch the world’s first DeFi ETF (DEFI11) and brought the fund to market in February.



“Hashdex&#8217;s main goal is to provide exposure to the most relevant investment thesis in crypto via regulated financial products like funds and ETFs,” Samir Kerbage, the firm’s chief technology officer and head of product told Blockworks. “[WEB311 and DEFI11] are aimed at the innovative investor who wants to have exposure to the crypto ecosystem in a regulated way.”



Though Kerbage declined to comment on specific products the firm could seek to launch in the future, he noted that Hashdex plans to continue launching offerings around the world.



The cryptoasset manager launched the world&#8217;s first crypto index ETF, the Hashdex Nasdaq Crypto Index ETF, in February 2021. The fund trades on the Bermuda Stock Exchange (BSX) and is for accredited non-US investors.



Hashdex has more than 250,000 investors in its products globally. Fidelity Digital Assets, Coinbase Custody and BitGo custody the digital assets it manages.



Although the US Securities and Exchange Commission has not yet approved ETFs that would invest in cryptoassets directly, several US issuers have filed for products investing in companies focused on Web3. 



Simplify Asset Management proposed a Web3 ETF in January, while fund managers <a href="https://www.sec.gov/Archives/edgar/data/0001364608/000144554621006106/etf2_485a.htm" target="_blank" rel="noreferrer noopener">First Trust</a>, <a href="https://cms.blockworks.co/proshares-files-for-metaverse-etf/" target="_blank" rel="noreferrer noopener">ProShares</a> and <a href="https://cms.blockworks.co/fidelity-plots-crypto-etfs/" target="_blank" rel="noreferrer noopener">Fidelity Investments</a> have revealed plans in recent months to offer metaverse ETFs.



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Hashdex Set To Launch Web3 ETF in Brazil on March 30

<div id="highlights-block_622b5d8ed55dc" class="highlights">
 <ul>
 <li>Steve Sadin is set to help build FTX’s new unit focused on gamers to earn, buy, sell, lend, borrow and trade game assets</li>
 <li>Travelocity co-founder seeks to help HOKK Finance transform from a meme token to a DeFi ecosystem</li>
 </ul>
 
</div>



Crypto exchange FTX named Steve Sadin its head of gaming partnerships as the company seeks to build out its <a href="https://cms.blockworks.co/ftx-to-launch-gaming-unit-to-support-mainstream-crypto-adoption/" target="_blank" rel="noreferrer noopener">new gaming division</a>.



In the newly created role, Sadin will collaborate with major gaming brands to help developers launch tokens and own digital assets using FTX’s upcoming crypto-as-a-service platform. FTX Gaming will focus on offering developers the crypto infrastructure needed to enable players to earn, buy, sell, lend, borrow and trade game assets inside and outside the games.



Sadin most recently led WB Game’s Boston studio, where he launched the mobile real-time strategy title, Game of Thrones: Conquest.



London-based crypto custodian firm Copper.co appointed Sabrina Wilson as its new chief operating officer.



Wilson was most recently global co-head of Citi’s futures, over-the-counter clearing and foreign exchange prime brokerage business. She has also served in various roles at Goldman Sachs, JPMorgan and Deutsche Bank.



“We need individuals like Sabrina who have experience across world leading traditional financial institutions to align our operations even closer with the needs of accredited investors, so it can best contribute to the evolution of global financial infrastructure,” Copper.co CEO Dmitry Tokarev said in a statement.



Valour, an issuer of digital asset ETP, hired John Sjöberg as its chief information officer. The Switzerland-based firm, which offers products focused on Solana, Polkadot, Cardano, Uniswap and others, has said <a href="https://cms.blockworks.co/cardano-polkadot-etps-hit-frankfurt-stock-exchange/" target="_blank" rel="noreferrer noopener">it plans to roll out</a> more single-asset, crypto basket and thematic ETPs (exchange-traded products) this year.



Sjöberg joins from Swedish stock exchange Nordic Growth Market where he served as chief technology officer and head of market data.



Blockchain infrastructure company Blockdaemon acquired crypto API company Gem, welcoming its CEO, Micah Winkelspecht, and a team of engineers and product professionals.



“Our united teams and products will be a formidable combination to serve both institutional and retail users of cryptocurrency,” Winkelspecht said.



The acquisition follows Blockdaemon’s recent Series C funding round of $207 million, giving it a post-money valuation of $3.25 billion.



Crypto-focused asset management firm Hashdex hired Nicole Dyskant as its global head of legal and compliance.



Dyskant founded law firm Dyskant Advogados, which represented more than 100 asset managers and investment advisers clients. She also co-founded Compliasset, a regulatory compliance software offering for the Brazilian fund industry.



HOKK Finance appointed Lawrence Hutson as its chief technology officer as it seeks to transform from a meme token to a DeFi ecosystem. The company recently launched an Ethereum aggregator and a range of yield-earning non-fungible tokens (NFTs).



Hutson co-founded and worked as chief technology officer for travel website Travelocity before Expedia acquired it for $280 million in 2015.



Vincent Berk has joined Quantum Xchange as its chief revenue and strategy officer. He was formerly the chief technology officer and chief security architect for Riverbed Technologies.



Quantum Xchange CEO Eddy Zervigon said in a statement that Berk joins the company at the beginning of a multiyear cryptographic transition that will require nearly all organizations to replace their classic encryption with quantum-safe solutions.



Symbiont, a fintech company using blockchain technology, hired Silvia Davi as its chief marketing and communications officer and Tom DeJarnette as its chief people officer.



Davi has held leadership roles at firms such as Nasdaq, Edelman, Instinet and Marsh McLennan. She more recently worked for fintechs Thesys Technologies and 280 CapMarkets and serves on the advisory board of the Museum of American Finance.



DeJarnette is a former consultant for the Voluntary Employee Benefits Association and was also a lead tactical planner and ground force commander during multiple combat deployments to Afghanistan and Iraq.



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Latest in Crypto Hiring: FTX Adds Gaming Partnerships Lead

<div id="highlights-block_61e8377d13fc7" class="highlights">
 <ul>
 <li>The ETF will “mirror” the CF Benchmarks’ DeFi Composite Index, which comprises decentralized applications, service protocols and the Ethereum network</li>
 <li>Hashdex launched the world&#8217;s first crypto ETF, the Hashdex Nasdaq Crypto Index ETF, in February 2021</li>
 </ul>
 
</div>



Crypto asset manager <a href="https://www.hashdex.com/en/hashdex" target="_blank" rel="noreferrer noopener">Hashdex</a> has gained approval to launch the world’s first decentralized finance (DeFi) ETF, the company announced on Wednesday.&nbsp;



The fund is expected to be listed on the Brazilian stock exchange, B3, on Feb. 17.



&#8220;We are confident that DeFi, through its innovative and disruptive technology, will exponentially grow and play a vital role in the financial sector of the future,” Hashdex CEO Marcelo Sampaio said in a statement. “By offering the first DeFi ETF in the world, we are providing our global investors with the ability to play a part in the next evolution of the crypto ecosystem.&#8221;



The ETF will “mirror” the <a href="https://www.cfbenchmarks.com/indices/BRTI" target="_blank" rel="noreferrer noopener">CF Benchmarks</a>’ DeFi Composite Index, the firm revealed. CF Benchmarks CEO Sui Chung noted that it will be the first DeFi index to be tracked by an ETF.



The index comprises 12 assets, including decentralized applications Uniswap, Aave, Compound, Maker, Yearn, Curve, Synthetix and Amp. It also invests in service protocols Chainlink, The Graph and Polygon, as well as the Ethereum network.



Similar index products exist within DeFi, with the largest by market capitalization being the <a href="https://www.tokensets.com/portfolio/dpi" target="_blank" rel="noreferrer noopener">DeFi Pulse Index</a> (DPI), which includes Uniswap, Aave and Maker as its top 3 holdings. DPI launched in September 2020 and has a market cap of $126 million. But the index product is primarily available on decentralized exchanges, like Uniswap.



Hashdex launched the world&#8217;s first crypto index ETF, the Hashdex Nasdaq Crypto Index ETF, in February 2021. The fund trades on the Bermuda Stock Exchange (BSX) and is for accredited non-US investors.



The firm also holds an exclusive partnership with Victory Capital, an asset manager with $162 billion in assets under management, as of Oct. 31, to bring crypto products to the US. The first product, the <a href="https://www.vcm.com/assets/crypto/SOLN%20Victory%20Hashdex%20Nasdaq%20Crypto%20ME.pdf" target="_blank" rel="noreferrer noopener">Victory Hashdex Nasdaq Crypto Index Fund</a>, is a private fund available to accredited investors.



QR Asset Management, also headquartered in Brazil, <a href="https://cms.blockworks.co/brazil-bitcoin-etf-follows-similar-launches-in-canada/" target="_blank" rel="noreferrer noopener">launched the first bitcoin ETF in Latin America</a> last June and quickly <a href="https://cms.blockworks.co/more-brazil-crypto-etfs-on-the-way-as-us-regulators-wait/" target="_blank" rel="noreferrer noopener">plotted other crypto ETF launches</a>. While ETFs that invest directly in cryptoassets also trade in Canada and parts of Europe, US regulators have not yet approved such products.&nbsp;



​​“I don’t think launches in Latin America are going to have any impact on the SEC’s decision-making process,” Dave Nadig, CIO and director of research for ETF Trends and ETF Database, previously told Bockworks. “If the [European Union] and Canada aren’t enough pressure, I don’t think pressure matters, to be honest.”



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