One River Asset Management Submits Proposal to SEC for Carbon-Neutral Bitcoin ETF


Institutional cryptocurrency fund manager One River Asset Management has joined the long list of asset managers pushing for the approval of a Bitcoin exchange-traded fund (ETF).

So far, the U.S Securities and Exchange Commission (SEC) has refused to approve any despite the onslaught of proposals.

MC02 Tokens To Represent Carbon Reduction

Putting a new twist to an already old narrative, One River aims to address Bitcoin's current carbon emission concerns.

According to an S-1 filing submitted to the SEC yesterday, One River says its Bitcoin ETF will be targeted towards reducing Bitcoin's carbon footprint.

This will see the One River Carbon Neutral Bitcoin Trust purchase and retire the carbon credits for the estimated carbon emissions tied to the Bitcoin the Trust will be holding.

One River would leverage on its partnership with carbon credit platform Moss. For every Bitcoin owned, One River will purchase and burn Etherum-based MC02 tokens to offset carbon emission. MC02 token is a carbon credit token created to compensate for carbon emissions.

These fungible tokens will be encrypted and tokenized using blockchain, and they will be stored on a registry managed by software firm Verra.

One River's green ETF proposal will be listed on the New York Stock Exchange (NYSE), and Coinbase has been selected as a custodian for the Trust.

One River says the initiative is meant to enable climate-conscious crypto investors to gain exposure to Bitcoin and Ethereum without worrying about the underlying environmental risks.

Bitcoin ETFs have been a hot topic in the US of late. Following a series of rebuttals from the SEC, innovative investment firms have continued making their case. One of the most famous critics of the initiative was former Chairman of SEC Jay Clayton, who felt the crypto industry was not yet ripe for an ETF offering.

Citing market manipulation and fraud, Clayton refused every ETF filing that came across his table for the world’s oldest cryptocurrency.

However, Clayton seems to have gone beyond this pessimistic view of the burgeoning industry. He is currently an adviser for One River, joining the firm's Academic and Regulatory Advisory Council in March 2021.

Clayton's involvement in the ongoing filing could play out in One River's favor following his experience with the SEC. With One River carefully targeting the energy signature of Bitcoin mining, it could herald a new era of ETF offerings in the crypto space.

Crypto Carbon Footprint: A Black Spot

The carbon footprint of proof-of-work (PoW) protocols like Bitcoin and Ethereum have been a hotly discussed topic in crypto in the past couple of weeks.

PoW consensus algorithm demands much electricity as miners or validators have to compete to solve complex mathematical puzzles. This sees much energy being utilized.

As captured by the University of Cambridge in a Bitcoin Consumption Index, the greenhouse gas emission of crypto mining has worried investors and climate activists. According to the index dedicated solely to BTC mining, PoW consumes as much as 112.57 TWh of electricity annually, more than small European nations.

This colossal energy demand has seen pro-crypto supporter Elon Musk back out of his commitment to the embattled cryptocurrency. Musk said his automobile firm would no longer accept Bitcoin as payment for its electric cars in a tweet. According to the eccentric billionaire, BTC's carbon footprint was environmentally unsustainable, and he is ready to adopt a protocol with less than 1% of BTC’s energy demands.

The environmental implications of PoW protocols have seen crypto protocols scale up their transitioning to a proof-of-stake (PoS) consensus algorithm, which consumes less energy and is way faster. Ethereum, the second most valuable cryptocurrency, is piloting its blockchain to a PoS in the coming months.

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