SEC votes to allow in-kind creations and redemptions for Crypto ETPs
30 July 2025 US
Image: sam richter/stock.adobe.com
The US Securities and Exchange Commission (SEC) will accept arrangements to authorise in-kind creations and redemptions by approved players for crypto asset exchange-traded product (ETP) shares.
The approval of the orders came after a vote by the Commission, and demonstrated a shift from newly endorsed spot bitcoin and ether ETPs.
Both spot bitcoin and ether ETPs were previously restricted to creations and redemptions on in-cash grounds.
The changes will allow bitcoin and ether ETPs to generate and reclaim shares on an in-kind basis, similar to other commodity-based ETPs the SEC has accepted.
This extends to exchange applications that aim to record and sell an ETP that would grasp mixed spot bitcoin and spot ether, alternatives on specific spot bitcoin ETPs, Flexible Exchange choices on shares of fixed bitcoin-based ETPs, and rise of position restrictions to common limits for options (up to 250,000 contracts) for filed options on specific BTC ETPs.
SEC Chairman Paul S. Atkins says: “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, says: “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, authorised participants, and investors, resulting in a more efficient market.”
The approval of the orders came after a vote by the Commission, and demonstrated a shift from newly endorsed spot bitcoin and ether ETPs.
Both spot bitcoin and ether ETPs were previously restricted to creations and redemptions on in-cash grounds.
The changes will allow bitcoin and ether ETPs to generate and reclaim shares on an in-kind basis, similar to other commodity-based ETPs the SEC has accepted.
This extends to exchange applications that aim to record and sell an ETP that would grasp mixed spot bitcoin and spot ether, alternatives on specific spot bitcoin ETPs, Flexible Exchange choices on shares of fixed bitcoin-based ETPs, and rise of position restrictions to common limits for options (up to 250,000 contracts) for filed options on specific BTC ETPs.
SEC Chairman Paul S. Atkins says: “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, says: “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, authorised participants, and investors, resulting in a more efficient market.”
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