Franklin Templeton Nears Launch of Cryptocurrency ETF Targeting Institutional Investors

Franklin Templeton is on the verge of launching a cryptocurrency exchange-traded fund (ETF) that will provide institutional investors with regulated exposure

Franklin Templeton is nearing the launch of a cryptocurrency exchange-traded fund (ETF) that will offer institutional investors regulated exposure to bitcoin and ether, pending approval from the U.S. Securities and Exchange Commission (SEC).

On Monday, Franklin Templeton filed Amendment No. 2 to its Form S-1 Registration Statement for the Franklin Crypto Index ETF, which is designed to track the CF Institutional Digital Asset Index – US–Settlement Price. The fund will initially hold bitcoin and ether, which will be custodied by Coinbase Custody Trust Company LLC. The Bank of New York Mellon will serve as the cash custodian, administrator, and transfer agent.

The original filing was made on Aug. 16, 2024, and this latest amendment provides more granular detail on the fund's structure and its journey through the regulatory approval process.

The ETF will be issued by the Franklin Crypto Trust, a Delaware statutory trust sponsored by Franklin Holdings LLC, and is set to be listed on the Cboe BZX Exchange under the ticker symbol “EZPZ.”

Pending regulatory approval, the ETF will commence trading on the Cboe BZX Exchange. According to a Form 19b-4 filed by the Cboe BZX Exchange on Sept. 19, 2024, the exchange is applying to list and trade shares of the trust on the BZX equities exchange. The application was published for public comment on Oct. 8, 2024, and the SEC extended its review period on Nov. 20, 2024, to allow for further deliberation.

An amendment to the proposal was filed on Dec. 17, 2024, prompting the SEC to seek additional public comments the following day. The public is invited to submit their feedback on the amended proposal until Dec. 29, 2024.

The ETF will issue shares in “Creation Units” of 50,000 shares, and transactions will occur in cash without engaging in staking or yield-generating activities.

Franklin Resources Inc., the parent company of Franklin Templeton, will be making an initial investment in the ETF. As per the prospectus, the company will purchase 4,000 shares at $25 each, converting these into bitcoin and ether to prepare for the ETF's launch. This initial investment amounts to $100,000.

The prospectus also includes a standard disclaimer, highlighting that “these securities may not be sold until the registration statement filed with the SEC is effective,” reiterating the necessity of regulatory approval before the ETF can commence trading.