Just in: SEC Delays In-Kind Redemptions for Bitcoin and Ethereum ETFs

The U.S. Securities and Exchange Commission (SEC) has postponed its decision on Fidelity’s request to include in-kind redemptions in its spot Bitcoin and Ethereum exchange-traded funds (ETFs). This decision comes as issuers across the crypto industry continue to seek approval for features aimed at improving ETF operations and efficiency.

SEC Postpones Fidelity’s In-Kind Redemption Feature

Fidelity is among several major asset managers that have filed to allow in-kind redemptions in their spot cryptocurrency ETFs. In-kind redemptions let authorized participants exchange ETF shares directly for the underlying crypto assets, instead of cash. These mechanisms are commonly used in traditional ETFs to reduce trading costs and tax consequences.

While the SEC recently acknowledged a similar request from BlackRock related to its spot Ethereum ETF, it has decided to delay Fidelity’s proposals for both Bitcoin and Ethereum ETFs. The regulatory agency has not provided a timeline for when a final decision might be made.

Fidelity is not the only issuer facing delays. In April, the SEC also postponed rulings on in-kind redemption proposals from WisdomTree for its Bitcoin Fund (BTCW) and Ethereum Fund (ETHW), as well as VanEck’s Bitcoin Fund (BITB).

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