The U.S. Securities and Exchange Commission delayed its decision on in-kind redemptions for the Bitwise Bitcoin ETF Trust and Bitwise Ethereum ETF, according to a Wednesday filing. This shows the latest sign of U.S. regulators’ restraint, even as the political environment for crypto has improved.
The SEC will rule by September 8, according to the filing. At that point, it could approve or deny the request, or elect to review the matter further, the document stated.
“The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change, and the issues raised therein,”
the filing said.
In-kind redemptions, where investors can redeem ETF shares for a fund’s underlying tokens to avoid certain tax liabilities, have been a sensitive topic. Regulators have raised concerns about their complexity and security, while issuers eagerly provide the same feature that is available in non-crypto ETFs.
The SEC set a new deadline of August 26 on Tuesday for BlackRock’s request to allow in-kind redemptions for its iShares Ethereum Trust (ETHA). It extended the maximum 90-day review period just days prior to the initial deadline, according to a filing.
SEC Faces Pressure Amid Pro-Crypto Policy Shift
The latest notice arrives as asset managers flood regulators’ desks with a flurry of applications for ETFs tracking the prices of memecoins, altcoins, and even NFTs. They also request to add staking and other attractive offerings to existing funds.
The filings have piled up as crypto industry regulations set during the Biden administration have been ratcheted back by U.S. President Donald Trump’s pro-crypto administration.
But although the SEC has welcomed pro-crypto chairman Paul Atkins and shook out digital asset skeptics from its ranks since January, it continues to exercise reserve in its dealings with crypto-based investment proposals.
The SEC put Grayscale’s multi-token ETF under review last week, inviting a strongly worded letter from the asset manager. The federal regulator also has not yet approved a rash of long-awaited spot Solana ETFs, although signs suggest that might happen soon.
Bitcoin traded at about $118,900 recently, showing a 1.1% increase in the past 24 hours, according to data provider CoinGecko. Ethereum traded at $3,360 during the same period, climbing 9% as its price rallied to a five-month high, the same data shows.
