TLDR

SEC Approves In-Kind Redemptions for Bitcoin, Ether ETPs, Slashing Costs

Crypto ETPs Gain Flexibility as SEC Approves In-Kind Transactions

SEC Boosts Crypto ETPs with Direct Bitcoin and Ether Transfers

Bitcoin, Ether ETPs Get Green Light for In-Kind Creations, Redemptions

SEC Modernizes Crypto ETP Rules, Easing Trade and Cutting Complexity

The Securities and Exchange Commission (SEC) approved a major change for crypto asset exchange-traded products (ETP). It now permits in-kind creations and redemptions by authorized participants. This update impacts several Bitcoin and Ether ETPs and brings them in line with other commodity-based ETPs.

I’m pleased to share the SEC approved in-kind creations and redemptions for crypto ETPs. The approvals continue to build a rational regulatory framework for crypto, leading to a deeper and more dynamic market, which will benefit all American investors. https://t.co/UbQ9pXlBpD pic.twitter.com/DX8ub16Ey3

— Paul Atkins (@SECPaulSAtkins) July 29, 2025

The change moves away from the earlier cash-only model, which added complexity and costs. The new rule allows ETPs to exchange underlying crypto assets directly. This shift allows smoother operations for ETP issuers and authorized participants across approved exchanges.

The approval includes several high-profile ETFs from major asset managers. Nasdaq, NYSE Arca and Cboe BZX received accelerated approval for in-kind operations. Approved issuers include BlackRock, Fidelity, Ark21, VanEck and Franklin Templeton.

Bitcoin ETPs Gain In-Kind Redemption Flexibility

The SEC has expanded operational tools for Bitcoin by approving in-kind creation and redemption procedures. This eliminates the need for conversions to cash during redemptions. Authorized participants can now exchange shares for physical bitcoin.

The decision also boosts market efficiency and lowers operational costs across the board. Firms had previously dealt with cash-only processes that slowed transactions. By permitting direct transfers, the SEC simplifies the structure of Bitcoin ETP trading.

The rule change follows over a year of technical discussions and lobbying by fund managers. Several Bitcoin ETPs had already demonstrated high trading efficiency. Now, the new mechanism further aligns them with traditional commodity ETPs.

Ether ETPs Included in SEC’s Updated Approval Orders

Ether-based ETPs are also cleared for in-kind redemptions and creations. These products will now handle the underlying ETH asset directly. This update allows them to function more like physical commodity ETFs.

Ether ETPs will no longer need to liquidate assets before settling trades. Instead, they can redeem or create shares through direct asset transfer, which reduces time and market impact during large transactions.

The SEC’s approval treats ETH products similarly to those backed by gold or oil. It reinforces the regulatory consistency across digital and traditional assets. This move supports broader market integration for ether-based funds.

ETP Market Expands with Broader Crypto Product Approvals

The SEC also approved additional rule changes related to crypto ETP offerings. These include mixed bitcoin-ether ETPs and options linked to certain bitcoin ETPs. FLEX options and position limit increases were also approved.

Position limits may now reach up to 250,000 contracts for listed BTC ETP options. This adjustment mirrors limits used for traditional products. It also supports higher-volume institutional participation in crypto derivatives.

The Commission issued two scheduling orders for public comment on new ETP proposals. These cover additional large-cap crypto-based products. The decisions reflect the SEC’s intention to support regulated crypto product growth.

 

The post SEC Approves In-Kind Redemptions and Creation for Bitcoin and Ether ETPs appeared first on CoinCentral.

---

Filed under: News - @ July 29, 2025 10:34 pm