tl;dr
The U.S. SEC has delayed its decision on in-kind redemptions for the Bitwise Bitcoin and Ethereum ETFs, with a ruling expected by September 8. In-kind redemptions allow investors to exchange ETF shares for underlying tokens, reducing tax liabilities, but regulators remain concerned about associated ...
The U.S. Securities and Exchange Commission (SEC) has postponed its decision on in-kind redemptions for the Bitwise Bitcoin ETF Trust and Bitwise Ethereum ETF, according to a recent filing. The SEC will deliver a ruling by September 8, with options to approve, deny, or extend the review further. The agency cited the need for more time to thoroughly consider the complexities involved in the proposed rule change.
In-kind redemptions allow investors to swap ETF shares directly for the underlying tokens, helping them avoid certain tax liabilities. However, regulators have expressed concerns over the complexity and security risks associated with this mechanism, despite issuers pushing for features similar to those in traditional non-crypto ETFs.
Recently, the SEC also extended the review deadline to August 26 for BlackRock’s request to enable in-kind redemptions in its iShares Ethereum Trust. This extension comes amid a surge in ETF applications related to memecoins, altcoins, NFTs, and staking features, following a regulatory easing under the former Trump administration, which contrasted with the prior Biden-era restrictions.
Despite leadership changes, including the arrival of pro-crypto chairman Paul Atkins and the departure of digital asset skeptics, the SEC remains cautious with crypto ETF proposals. It placed Grayscale's multi-token ETF under review last week, prompting a strong response from the asset manager, and has yet to approve several anticipated spot Solana ETFs.
In the market, Bitcoin recently traded around $118,900, marking a 1.1% increase over 24 hours, while Ethereum surged to $3,360, up 9%, reaching a five-month high. This price momentum underscores growing investor interest despite regulatory uncertainty surrounding crypto-based ETFs.