One River has filed for a carbon-neutral bitcoin ETF that makes up for the emissions from mining the blockchain with the use of carbon credits.
Digital asset management firm One River has filed for a bitcoin ETF that is carbon-neutral. The S-1 filing, which was submitted on May 24, would compensate for bitcoin’s carbon emissions via the purchase and disposal of carbon credits.
However, the firm will not provide direct exposure to bitcoin. Instead, it will be associated with third parties to offer the asset through the selling and redeeming of shares.
One River is working with Uruguayan firm Moss Earth to purchase blockchain tokens that prove its reduction in carbon emissions. These carbon credits are visible on a registry with Verra. Additionally, Coinbase will act as the custodian for the bitcoin assets.
One potential upside of this filing is that former SEC Chairman Jay Clayton acts as an adviser to the firm. Clayton’s experience with the cryptocurrency market and knowledge of regulation could perhaps be the differentiating factor in approval.
The filing comes as discussions surrounding bitcoin’s energy consumption have become a major pain point for the industry. This was fuelled by Tesla’s recent decision to stop accepting bitcoin payments because of its heavy power consumption.
The U.S. carefully considering regulations
The U.S. Securities and Exchange Commission (SEC) is yet to approve a bitcoin ETF, despite several filings in the past 12 months. The SEC’s officials have been wary of approving an ETF, reportedly because of concerns related to investor protection and market manipulation.
A bitcoin ETF would give investors direct exposure to cryptocurrency via its listing on a stock exchange. While it would be a significant step forward for the market, the volatility of the market could indeed prove too much for an average retail investor with little experience with the market.
The SEC did recently delay its decision to approve a VanEck ETF by 45 days, but the outlook is generally pessimistic. Several recent comments made by officials, including those by the newly appointed Acting Comptroller of the OCC, seem to suggest that authorities may impose restrictions on the market.
Generally speaking, it appears that the U.S. is taking its time to implement a comprehensive regulatory framework for the market. There is no sign as to whether it will be strict or lax. In whatever public commentary is available, these officials have stated that investor protection is a key factor in determining regulation.