Bitcoin News Today: SEC approves in-kind redemptions for crypto ETPs to boost efficiency

The U.S. Securities and Exchange Commission (SEC) has approved in-kind creation and redemption mechanisms for cryptocurrency exchange-traded products (ETPs), marking a significant step forward in the evolution of regulated crypto investment vehicles [1]. This development allows authorized participants to exchange shares of SEC-approved Bitcoin and Ethereum funds directly for the underlying assets, rather than using cash [2]. According to SEC Chairman Paul Atkins, the change is part of a broader strategy to create a modern, purpose-built regulatory framework for digital assets, and he emphasized that the new approach will make crypto ETPs "less costly and more efficient" [1]. Jamie Selway, director of the SEC’s Division of Trading and Markets, added that in-kind redemptions provide greater flexibility and cost savings for issuers, participants, and investors [1].

Previously, SEC-approved crypto ETFs operated under a cash-only redemption model. The shift to in-kind redemptions is expected to reduce transaction costs and enhance market efficiency [2]. This regulatory change reflects growing demand for more flexible and efficient investment mechanisms, particularly in a rapidly evolving digital asset market. At the Bitcoin Policy Institute conference last month, SEC Commissioner Hester Peirce acknowledged the increasing interest in in-kind redemptions, signaling a broader policy shift toward supporting the digital asset industry [1]. This change is also aligned with the Trump administration’s support for crypto innovation and recent Congressional action on digital asset-related legislation.

The market has responded positively to the news, with crypto ETFs continuing to see strong demand. US spot Bitcoin ETFs have recorded a 12-day streak of inflows totaling $6.6 billion, bringing total holdings to over 1.298 million BTC, valued at approximately $152.1 billion [1]. Ethereum ETFs are also gaining traction, with BlackRock’s iShares Ethereum ETF reaching over $10 billion in assets in just 251 days [1]. The approval of in-kind mechanisms is likely to further accelerate this growth, potentially ushering in a new era of more efficient and investor-friendly crypto investment products.

In contrast to the SEC’s swift regulatory progress, the Commodity Futures Trading Commission (CFTC) faces uncertainty as the Senate Agriculture Committee delayed a hearing on Brian Quintenz’s nomination to chair the agency [1]. The delay came after a request from the White House just days before lawmakers leave for their August recess. This is the second postponement of the hearing, which had initially been scheduled for July 21 and again for before the August 4 recess [1]. Committee Chair John Boozman and Ranking Member Amy Klobuchar confirmed the delay, though no new hearing date has been set. A spokesperson for the committee said the decision originated from the White House, but no official explanation was provided.

Quintenz, a former CFTC commissioner under President Trump, has previously faced scrutiny, including a June hearing where he disclosed approximately $3.4 million in assets and answered questions about his background [1]. His confirmation is considered critical as the Senate prepares to take up legislation in September that defines regulatory responsibilities between the CFTC and the SEC over digital assets. Quintenz is viewed as crypto-friendly, and his appointment could influence the future direction of U.S. digital asset policy, especially in light of the Trump administration’s reduced emphasis on high-profile crypto enforcement actions following the departure of former SEC Chair Gary Gensler [1].

The CFTC currently faces a leadership vacuum, with three of its five commissioners having left their positions. Acting Chair Caroline Pham has indicated she would resign if Quintenz is confirmed, and the agency’s leadership is in flux at a pivotal moment for crypto regulation [1]. Trump has not yet announced replacements for the four seats that would remain vacant after Quintenz’s potential confirmation, further adding to the uncertainty around the CFTC’s future direction.

Source: [1] SEC Approves In-Kind Redemptions for Crypto ETPs (https://coinmarketcap.com/community/articles/688a1f7d1c29df0fa3641d0e/)