The Securities and Exchange Commission (SEC) voted today to approve in-kind creations and redemptions for crypto asset exchange-traded product (ETP) shares.

The decision reflects a departure from recently approved spot bitcoin and ether ETPs, which were limited to creations and redemptions on an in-cash basis. Bitcoin and ether ETPs will be permitted to create and redeem shares on an in-kind basis.

“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.”

“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. This decision aligns with the standard practices for similar ETPs.”

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.”

(source)