Michaela
Summary: What did the SEC change about how a crypto ETP is created and redeemed?
The SEC now allows a crypto ETP to use in-kind transactions for share creation and redemption, instead of requiring cash. This change is expected to reduce costs and increase efficiency for both issuers and investors, signaling a step toward deeper integration of crypto into traditional finance.
The U.S. Securities and Exchange Commission (SEC) has approved new orders allowing authorized participants to create and redeem crypto ETP shares using in-kind transactions, marking a regulatory shift in how these products can operate.
In a recent press release, the SEC noted that the approved orders represent a shift from the structure used in previously approved spot Bitcoin and Ethereum exchange-traded products (ETPs), which required cash-based creations and redemptions.
“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 Chairman Paul Atkins stated.
Atkins further noted that the latest approvals contribute to establishing a more coherent regulatory framework for crypto, aiming to support the growth of a more robust and accessible market for U.S. investors.
“The Commission’s decision today is an important development for the growing marketplace for crypto-based ETPs,” Director of the Division of Trading and Markets, Jamie Selway, stated. “In-kind creation and redemption provide flexibility and cost savings to ETP issuers, authorized participants, and investors, resulting in a more efficient market,” he added.
Additionally, the Commission approved a series of orders aimed at maintaining a neutral approach to crypto investment products. These include allowing exchanges to list and trade ETPs that hold a mix of spot Bitcoin and spot Ether, permit standard and Flexible Exchange (FLEX) options on certain Bitcoin ETPs, and raise the position limits for options on those products, up to the standard maximum of 250,000 contracts.
As the regulatory landscape continues to evolve, these latest approvals signal a broader shift in how crypto-based financial products are treated within traditional market structures. While many uncertainties remain, one thing is clear: digital assets are no longer operating at the fringes.
They’re steadily integrating into mainstream financial systems, and regulators are moving, albeit cautiously, toward frameworks that recognize their long-term viability. For issuers and investors alike, the message is subtle but important: innovation in the crypto sector won’t be stifled by outdated rules, as long as it can prove durable and transparent.
Still, the road ahead isn’t without friction. Market participants must remain alert, as each regulatory development carries implications not just for new products but for how digital assets are perceived and used. In this moment of convergence, both traditional finance and crypto are being asked to adapt and possibly redefine the future of investing together.
Read More
- SEC Delays Trump-Backed Bitcoin ETF and Other Major Crypto Funds Again
- SEC Approves Bitwise Crypto ETF – Then Slams the Brakes Hours Later
- NYSE Seeks Approval to List Trump-Backed Bitcoin and Ethereum ETF
Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
