VanEck files first U.S. BNB ETF as altcoin ETF race heats up

• VanEck filed to launch the first U.S. spot BNB ETF, aiming to track Binance Coin directly.
• The proposed ETF holds real BNB, may enable staking, and faces high volatility risks.

VanEck has officially filed a registration statement with the U.S. Securities and Exchange Commission (SEC) to launch the first-ever spot BNB ETF.

This marks a significant development in the altcoin ETF space, which has over 70 active applications.

If approved, VanEck’s BNB ETF would provide U.S. investors with direct exposure to the price movements of Binance Coin [BNB] through a regulated investment vehicle.

VanEck moves first on spot BNB ETF in U.S. markets

The registration, filed on the 2nd of May, marks the first known attempt to introduce a spot BNB ETF in U.S. markets.

The fund is set to be listed on a national exchange under a yet-to-be-disclosed ticker. In April, VanEck established a legal entity in Delaware, laying the foundation for the filing.

According to the prospectus, the ETF is designed to track BNB’s price, excluding operational costs. This move is part of VanEck’s ongoing efforts to enhance investor access to digital assets through traditional financial instruments.

ETF analyst Eric Balchunas noted that CZ and Jan Van Eck both attended Token2049, though not on the same panel.

CZ is known to hold private talks at such events, but there’s no sign he met with Van Eck. Still, Balchunas said CZ’s public comments might hint at his view on a BNB ETF.

“This cycle so far has been the ETFs. And it’s almost all Bitcoin. Ether hasn’t had as much success, but Bitcoin success will spill over to the others eventually. It takes time, though. I think we are still early,” Balchunas quoted from CZ’s conference appearances.

Custody-based ETF with institutional-grade indexing

The ETF will hold actual BNB tokens, with valuations based on an index calculated by MarketVector Indexes. This index tracks prices from the top five global trading platforms, ranked by liquidity and volume.

Authorized participants will issue and redeem ETF shares in large blocks, called “Baskets”. These transactions will be conducted through cash payments or in-kind BNB transfers.

Retail investors can buy and sell shares on secondary markets. Prices will be determined by supply, demand, and the fund’s BNB holdings.

The ETF is not registered under the Investment Company Act of 1940. It does not qualify as a commodity pool and falls outside the CFTC’s jurisdiction. Additionally, it is not classified as an investment adviser.

Staking, capital, and risk disclosure

VanEck has revealed that, pending regulatory approval, the fund may stake BNB through trusted providers, potentially including VanEck affiliates. Any staking rewards would be treated as income for the trust.

The ETF has already received seed capital from a private investor, who initially purchased “Seed Shares” before exchanging them for ETF shares at the time’s BNB index value.

However, the ETF carries significant risk, with concerns over BNB’s volatility and the potential for total loss. The FDIC and other government agencies do not insure the shares, and the fund will not claim forked tokens, airdrops, or similar rights.