The Securities Exchange Commission SEC accepted a registration form from VanEck Asset Manager on May 2 for its inaugural BNB spot-based Exchange-Traded Fund in the United States market. A national exchange will list this fund under a symbol which still remains undisclosed. A month previously VanEck established the BNB ETF with its main operations in Delaware before submitting its application to the SEC.
Fund Structure
The ETF targets the net value of BNB by subtracting operational expenses from its market price based on the findings in its preliminary prospectus. Actual BNB tokens are held within the fund while MarketVector Indexes determines values through prices obtained from the five leading trading platforms. VanEck plans to involve in BNB staking activities once regulatory approval is granted and this may produce additional BNB from trusted providers.
Trading and Redemptions
Only financial institutions authorized to hold “Baskets” can perform share transactions with the ETF. Shares available for direct creation are issued only to institutional players by the fund while retail investors make transactions at secondary markets where prices move based on market demand. The fund has received seed money from initial stock issuance that uses BNB index pricing for valuation.
Risk Factors
The ETF exposes investors to substantial risks because of the volatile behavior of BNB which has the potential to generate major financial losses. The shares do not qualify for both FDIC insurance nor backing from any federal institution. The BNB fund will never take possession of any forked assets or airdropped tokens because of owning the BNB cryptocurrency.
