August 15, 2025
What happened?
On July 29, 2025, the Securities and Exchange Commission (“SEC”) voted to approve orders to permit in-kind creations and redemptions by authorized participants for crypto asset exchange-traded product (ETP). This removes a structural barrier that asset managers have sought since the first products tied to crypto assets were approved last year. Previously, the approvals of spot bitcoin and ether ETPs were required to provide creations and redemptions on an in-cash basis.
The latest approvals put bitcoin and ether ETPs on the same footing as other commodity-based ETPs by allowing for creations and redemptions in the underlying commodity. “It’s a new day at the SEC, and a key priority of my chairmanship is developing a fit-for-purpose regulatory framework for crypto asset markets,” said SEC Chairman Paul S. Atkins. “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.”
The Commission also voted to approve other orders that advance a merit-neutral approach to crypto-based products, including exchange applications seeking to list and trade an ETP that would hold mixed spot bitcoin and spot ether, options on certain spot bitcoin ETPs, Flexible Exchange (FLEX) options on shares of certain BTC-based ETPs, and an increase of position limits up to the generic limits for options for listed options on certain BTC ETPs. The SEC also requested public comments on the Division of Trading and Market’s approval of a national securities exchange’s proposals to list and trade two large-cap crypto-based ETPs.
What does this mean for me?
With a crypto-friendly Chairman, a series of SEC-hosted crypto roundtables, and the establishment of a crypto task force, it is no surprise to see SEC approvals that advance crypto-based products. The White House working group on digital assets is also pushing the SEC and the Commodity Futures Trading Commission for more innovation to make America the “crypto capital of the world.” If you have any questions, please contact us, and a member of our team will be in touch.
