Franklin Templeton Updates Crypto Index ETF Filing

Franklin Templeton has filed Amendment No. 2 to its Form S-1 Registration Statement with the U.S. Securities and Exchange Commission (SEC), refining the details of its Franklin Crypto Index ETF.

The ETF aims to track the CF Institutional Digital Asset Index – US–Settlement Price, initially holding only Bitcoin (BTC) and Ethereum (ETH). Coinbase Custody Trust Company LLC will serve as the custodian for digital assets, while Bank of New York Mellon will act as the cash custodian, administrator, and transfer agent.

According to the filing:

“The fund currently may not hold any digital asset other than Bitcoin and Ether. It is uncertain whether any digital assets other than Bitcoin and Ether may in the future be added to the Underlying Index.”

Regulatory Review Timeline

Franklin Templeton first submitted its Form S-1 on August 16, 2024. Since then, the SEC has been reviewing the proposal, with the process unfolding as follows:

• September 19, 2024 – Cboe BZX Exchange filed for a rule change to allow the ETF listing.
• October 8, 2024 – The proposal was published for public comment in the Federal Register.
• November 20, 2024 – The SEC extended its review period to allow for further evaluation.
• December 17, 2024 – Cboe filed an amendment to its proposal.
• December 18, 2024 – The SEC requested additional public comments on the filing.

While the SEC has yet to approve the ETF, this latest amendment provides further clarity on its structure and operational details.

ETF Structure and Investment Terms

The Franklin Crypto Index ETF will be listed on Cboe BZX Exchange under the ticker symbol “EZPZ”, with shares issued in Creation Units of 50,000 shares.

Key operational details include:

• No staking or yield-generating activities with crypto holdings.
• Authorized participants must transact in cash.
• Franklin Templeton’s parent company, Franklin Resources Inc., provided a $100,000 seed investment, purchasing 4,000 shares at $25 each, later converted into Bitcoin and Ethereum.

The ETF is designed to provide regulated exposure to crypto assets with a cost-effective structure, but trading will not begin until SEC approval is granted.

What’s Next?

The SEC is still evaluating the filing, and until the registration statement is declared effective, the ETF remains unavailable for public trading.

The prospectus explicitly warns investors, stating:

“These securities may not be sold until the registration statement filed with the SEC is effective.”

As regulatory scrutiny of crypto ETFs continues, Franklin Templeton’s amended filing underscores the growing institutional demand for crypto investment products—and sets the stage for potential SEC approval in 2024.