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3w ago

SEC Enables In-Kind Bitcoin and Ether ETF Settlements, Unveils Project Crypto

Commissioner Hester Peirce's task force will translate broad policy proposals into draft rules for on-chain markets.

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Chairman of the Securities and Exchange Commission (SEC) Paul Atkins looks on during his swearing-in ceremony, at the White House in Washington, D.C., U.S., April 22, 2025. REUTERS/Kevin Lamarque/File photo
In kind bitcoin and ether etfs: how they will reshape the crypto market?
Sparks strike representation of cryptocurrency Bitcoin in this illustration taken November 24, 2024. REUTERS/Dado Ruvic/Illustration/File Photo

Overview

  • The SEC’s new orders, effective July 29, allow authorized participants to create and redeem spot Bitcoin and Ethereum ETF shares directly for the underlying tokens instead of cash.
  • In-kind settlement aligns crypto ETFs with traditional commodity products, reducing transaction costs and improving tax efficiency for institutional investors.
  • The Commission also approved mixed Bitcoin-Ether ETPs, listed and FLEX options on Bitcoin ETFs, and raised position limits on BTC options to 250,000 contracts to deepen market liquidity.
  • Project Crypto, announced July 31 by Chair Paul Atkins, aims to modernize securities regulations and enable tokenized trading, custody, and fundraising on blockchain platforms.
  • A dedicated task force led by Commissioner Hester Peirce will draft clear token classification standards, safe harbors for ICOs, airdrops, and network rewards, and pathways for on-chain market integration.