I just find it amazing that the SEC would approve a Bitcoin ETF at all considering the Tether problem was never really addressed, there wasn't a proper audit as far as I can tell. If you check the Blackrock fillings they included on the pdf what's basically disclaimers about the risk of tetherings going on that could cause in loses for investors. So if they approve this they don't really care about that. I've always thought that if they approve a Bitcoin ETF, is because they have a plan to try to use it to control it in some way, probably via liquidity, then try to influence exchanges and miners into a Blackcoin of sorts.
the whole auditing of BTC vs shares is easy. thats why they said(months prior) to most applicants to nominate a custodian(to audit)
at the moment(this week) it appears the SEC is poking at the applicants about the inflow and outflow of shares vs other currency
however the next question is if brokers wanted to sell a whole basket of shares to close down a broker/agent or trust wanted to consolidate the number of shares. could the custodian then unlock the BTC to exchange btc to fiat to pay out cash to the seller..
(and what impact would 1-x baskets have on that said exchange market)
most applicants said it would be much easier to not do 'in cash' sale but instead 'in-kind' swap whereby the seller gets BTC.. however the SEC is against the idea of in-kind swaps from shares to btc.. for many other reasons.. SEC/IRS prefers shares for cash... but, with that said. the SEC wants to know the custodian can handle locking and selling baskets of bitcoin to offer large lumps of cash. without it pumping or dumping the market or causing liquidity issues for the custodian/exchange