Is Blackrock's Bitcoin Spot ETF in a dominant position? Its subsidiary funds have been fined by the SEC before the approval of the ETF.

Just as the entire crypto space is eagerly anticipating the launch of the BlackRock Bitcoin ETF, it seems that BlackRock has been fined by the U.S. Securities and Exchange Commission (SEC).

BlackRock Agrees to Pay SEC $2.5 Million Fine

According to the SEC announcement, BlackRock Advisors, LLC, a subsidiary of BlackRock, has settled with the SEC and agreed to pay a $2.5 million fine for "failing to accurately describe its investments in the entertainment industry" in Aviron Group.

According to CB Insights, Aviron Group is a holding company under Aviron Pictures, a film distributor. The SEC's charges include:

1. Multiple BlackRock divisions invested heavily in Aviron Group, LLC through the BIT income trust fund

2. BlackRock incorrectly portrayed Aviron as a financial services company

3. BlackRock exaggerated the interest rates paid by Aviron

4. BlackRock has violated the Investment Advisers Act of 1940 and the Investment Company Act of 1940

The announcement notes that errors were found in fund reports by BlackRock in 2019, which were subsequently corrected, but it does not explain why the fine was imposed in 2023.

Enforcement Division Director Andrew Dean stated:

Investment adviser BlackRock had a responsibility to provide this critical information, which it failed to do in its investment in Aviron.

BlackRock in the Limelight of the Crypto Space

BlackRock became a focal point in the cryptocurrency space in the second half of the year due to its submission of the Bitcoin spot ETF under the code IBTC. Just the listing and apparent deletion of IBTC by the U.S. clearinghouse DTCC caused significant fluctuations in Bitcoin's price.

• 10/23: Bitcoin Surges to $34K! Is BlackRock's Bitcoin Spot ETF Launch Legitimate?

• 10/25: BlackRock's Bitcoin Spot ETF Leads to BTC Volatility for Two Consecutive Days