SEC: Crypto ETFs Can Create, Redeem Shares using BTC, ETH

The SEC is allowing crypto ETFs to create and redeem shares using Bitcoin and Ethereum directly instead of cash. A recent SEC press release confirms the development, and the new rule is effective as of today. “Today’s approvals continue to build a rational regulatory framework for crypto, leading to a deeper and more dynamic market, which will benefit all American investors,” the regulator said in a statement.

“It’s a new day at the SEC, and a key priority of my chairmanship is developing a fit-for-purpose regulatory framework for crypto asset markets,” said SEC Chairman Paul S. Atkins. “I am pleased the Commission approved these orders permitting in-kind creations and redemptions for a host of crypto asset ETPs. Investors will benefit from these approvals, as they will make these products less costly and more efficient.”

SEC Continues Pro-Crypto Approach to ETFs

Additionally, the Commission voted to approve other orders that advance a merit-neutral approach to crypto-based products, including exchange applications seeking to list and trade an ETP that would hold mixed spot bitcoin and spot ether, options on certain spot bitcoin ETPs.

Also Read: PayPal Adopts XRP: 530% Rally Prediction as SEC Vote Looms

Over the last several months, the Securities and Exchange Commission has been issuing plenty of pro-crypto decisions and rulings. While the recent postponement of several crypto ETFs was a step backwards, it doesn’t undermine the regulator’s switched stance on the crypto industry. Since the new Presidential Administration took charge, crypto has been thrust into the regulatory spotlight. As a result, several top crypto coins are near ATH levels, and institutional interest in digital assets has never been higher.

Jamie Selway, Director of the Division of Trading and Markets, said, “The Commission’s decision today is an important development for the growing marketplace for crypto-based ETPs. In-kind creation and redemption provide flexibility and cost savings to ETP issuers, authorized participants, and investors, resulting in a more efficient market.”