Why Are In-Kind Redemptions Important in Bitcoin and Ethereum ETFs That Were Approved by the SEC Minutes Ago? Here’s How They Benefit the Industry

Greg Xethalis, Chief Legal Counsel at Multicoin Capital Management, highlighted the importance of the decision regarding the “in-kind creation and redemption” process for cryptocurrency spot ETFs, which the U.S. Securities and Exchange Commission (SEC) approved minutes ago. Xethalis stated that this decision by the SEC is a significant turning point for the crypto asset markets and explained four main benefits: Standard Compliance: Stating that the decision brings crypto asset ETFs in line with physical commodity ETFs such as gold, Xethalis stated that authorized participants (AP) will be able to deliver and purchase assets in kind through their subsidiaries. Increased Regulatory Oversight: Xethalis stated that in-kind transactions will be conducted on behalf of regulated brokerage firms rather than unregulated funds, and that this will provide greater regulatory oversight in crypto asset buying and selling processes. Tax and Market Efficiency: Xethalis stated that in-kind creation and redemption transactions create a more efficient market environment for fund shareholders, and that most ETFs with a Grantor Trust structure can operate in this way without creating a tax burden. Related News: BREAKING: Historic Moment - SEC Approves In-Kind Redemptions for Bitcoin and Ethereum Spot ETFs Reduced Manipulation Risk: Xethalis also stated that large-scale redemption and creation transactions will be conducted more transparently, not only for cash-based funds but also for in-kind funds. This, he stated, makes it more difficult for theoretical price manipulations to occur around the creation/redemption process of ETF shares. According to Xethalis, this move by the SEC is a significant gain not only in terms of market efficiency but also in terms of investor protection and structural integrity. *This is not investment advice. Continue Reading: Why Are In-Kind Redemptions Important in Bitcoin and Ethereum ETFs That Were Approved by the SEC Minutes Ago? Here’s How They Benefit the Industry