The world’s largest asset manager has filed an amendment to its Bitcoin exchange-traded fund (ETF) following broad investor concerns over Coinbase’s on-chain settlement practices.

In a filing with the Securities and Exchange Commission (SEC) on September 16, BlackRock requested an amendment requiring Bitcoin withdrawals to be made within 12 hours from Coinbase, the ETF’s custodian.

BlackRock wrote in the filing:

“Subject to the required minimum balance approval set forth above, Coinbase Custody will process withdrawals of Digital Assets from the Custody Account to a public blockchain address within 12 hours following an Instruction received by Customer or Customer’s Authorized Representative.”

BlackRock’s new change comes after widespread concerns grew about Coinbase’s ETF custody practices. Investors are increasingly demanding that Coinbase provide on-chain proof of Bitcoin purchased on behalf of spot ETFs.

Coinbase is the custodian of 10 of the 11 U.S. spot Bitcoin ETFs and 8 of the 9 newly approved Ether (ETH) ETFs. Despite new institutional flows from Bitcoin ETFs, BTC prices have been stagnating for the past three months.

This raised investors’ concerns that Coinbase was purchasing “paper BTC” or Bitcoin IOUs on behalf of Bitcoin ETF issuers, leaving the Bitcoin price under pressure.

However, all ETF transactions ultimately occur on-chain; According to Coinbase co-founder and CEO Brian Armstrong, not all ETF addresses are shared publicly.

In response to investor concerns, Armstrong wrote in an X post on September 14:

“If you want an audit, Deloitte audits us annually, we’re a public company. I doubt they wouldn’t want our institutional clients to get their addresses dusty, and it’s not their place to post about it. If you want a massive influx of institutional money into Bitcoin, this is what it looks like.”

Investor concerns began to rise in August after Coinbase announced the development of Coinbase BTC (cbBTC), the new Wrapped Bitcoin (WBTC). Launched in January, the ETFs have accumulated more than $59.2 billion in on-chain assets, according to Dune data.

BlackRock’s IBIT remains the largest Bitcoin ETF with more than 38% market share and more than $22.5 billion in on-chain assets.

Despite the increasing accusations, it is stated that ETFs are not the cause of Bitcoin’s recent price drop, and that this is caused by local Bitcoin holders. Bloomberg senior ETF analyst Eric Balchunas wrote in an X post on September 15:

“I understand why these theories exist, and people want to scapegoat ETFs. Because it’s impossible to think that local HODLers could be sellers. But they are. What all ETFs and BlackRock do is constantly rescue the price of BTC from the bottomless pit .”

As of February 15, ETFs accounted for approximately 75% of new investments in Bitcoin, and Bitcoin had surpassed the $50,000 level.