SEC Approves Orders Related to Permitting In-Kind Creations and Redemptions for Crypto Exchange-Traded Product Shares

The SEC has approved orders permitting “in-kind creations and redemptions by authorized participants for crypto asset exchange-traded product (ETP) shares.” Under the orders, creations and redemptions for bitcoin and ether ETPs, which were previously limited to an in-cash basis, would be consistent with those for other SEC-approved, commodity-based ETPs (i.e., the creations and redemptions would be permitted on an in-kind basis). In voicing support for the orders, SEC Division of Trading and Markets Director Jamie Selway stated that this is “an important development for the growing marketplace for crypto-based ETPs” since “[i]n-kind creation and redemption provide flexibility and cost savings to ETP issuers, authorized participants, and investors, resulting in a more efficient market.”

For more information, see the press release and the statement by SEC Commissioner Mark Uyeda on the SEC’s Web site.