The SEC has extended its review of in-kind redemptions for two major crypto ETFs.
- The SEC is delaying its decision on Bitwise’s Bitcoin and Ether spot ETFs.
- In-kind redemptions could reduce taxes for ETF investors.
- Regulators say they need more time to study the proposal.
What In-Kind Redemptions Mean for Crypto ETFs
The U.S. Securities and Exchange Commission (SEC) is reviewing a proposal for in-kind redemptions on two crypto ETFs. These are spot ETFs for Bitcoin (BTC) and Ether (ETH), managed by Bitwise. If approved, in-kind redemptions would let investors swap ETF shares for the actual crypto, not cash.
This could help some investors avoid taxes that come with selling ETF shares for money. Instead, they would just receive the same amount of crypto directly.
SEC Extends Its Decision Timeline
The decision applies to ETFs listed on NYSE Arca. The SEC announced it needs more time to consider the proposed rule. By law, the SEC can extend its review up to 90 days. This is not the first delay. The SEC often takes the full time when ruling on crypto-related issues.
Bitwise and Grayscale Face SEC Delays
The SEC’s delay is part of a larger trend. Earlier this month, lawyers for Grayscale challenged another delay affecting their Digital Large Cap ETF. The regulator had already approved it. However, the SEC later decided to pause the decision for more review. Grayscale says this move broke the rules.
A Shift in SEC’s Crypto Attitude
Since Paul Atkins became SEC Chair, the agency’s outlook on crypto has changed. Atkins says he wants to create rules that help new financial products grow. He also said the SEC should stop using unclear laws and focus on giving firms more clarity. He called tokenization an innovation worth supporting.
This change may lead to better rulemaking for ETFs and other crypto-based assets. Still, delays like this one continue to frustrate companies and investors hoping for faster answers.
Source: cointelegraph.com
