SEC Approves In-Kind Redemptions for Crypto ETPs
Main Idea
The SEC has approved in-kind creation and redemption for cryptocurrency ETPs, marking a significant milestone for regulated crypto investment vehicles, while the CFTC faces leadership uncertainty amid delayed nominations.
Key Points
1. The SEC approved in-kind creation and redemption for cryptocurrency ETPs, allowing direct exchange of shares for underlying crypto assets, which is seen as more efficient and cost-effective.
2. SEC Chairman Paul Atkins and Jamie Selway highlighted the benefits of in-kind redemptions, including flexibility and cost savings for issuers and investors.
3. Previously, SEC-approved crypto ETFs were limited to cash-only redemptions, but regulatory sentiment has shifted, with increasing demand for in-kind mechanisms.
4. US spot Bitcoin ETFs have seen significant growth, holding over 1.298 million BTC ($152.1 billion), and Ethereum ETFs like BlackRock’s iShares Ethereum ETF have reached $10 billion in assets.
5. The CFTC faces leadership uncertainty as the Senate Agriculture Committee delays the vote on Quintenz’s nomination, which was postponed twice, adding to regulatory instability in the crypto sector.
Description
This allows authorized participants to swap ETF shares directly for Bitcoin or Ethereum instead of cash. This also is expected to reduce transaction costs and increase market efficiency. SEC Chairman Paul Atkins described the change as part of a broader strategy to create a modern, purpose-built regulatory framework for digital assets. Meanwhile, the Senate Agriculture Committee once again delayed a hearing on Brian Quintenz’s nomination to chair the Commodity Futures Trading Commission (CFTC), ...
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