On 29 July 2025, the United States Securities and Exchange Commission (US SEC) published in Release No. 2025-101, titled “SEC Permits In-Kind Creations and Redemptions for Crypto ETPs,” the orders enable Bitcoin and Ether ETPs to adopt in-kind mechanisms for share creation and redemption. This shift from the US SEC’s previous framework, which restricted spot Bitcoin and Ether ETPs to cash-only transactions. The change brings crypto ETPs into alignment with the operational norms of other commodity-based ETPs under US SEC oversight. This is a broader policy orientation toward regulatory parity and functional consistency across asset classes, where the in-kind model, already standard for many commodity ETPs, can now be applied to crypto products.
US SEC Chairman Paul S. Atkins stated: “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. 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.”
Commissioner Atkins added “a rational regulatory framework for crypto, leading to a deeper and more dynamic market, which will benefit all American investors.”
Jamie Selway, Director of the US SEC’s Division of Trading and Markets, added, “The Commission’s decision today is an important development for the growing marketplace for crypto-based ETPs. In-kind creation and redemption provide flexibility and cost savings to ETP issuers, authorized participants, and investors, resulting in a more efficient market.”
Alongside the core approval, the US SEC also voted in favour of several complementary orders that reinforce a merit-neutral approach to crypto financial instruments. These include:
- Approval of exchange applications to list and trade an ETP that holds both spot Bitcoin and spot Ether;
- Authorisation of listed options on certain spot Bitcoin ETPs;
- Approval of Flexible Exchange (FLEX) options on shares of selected BTC-based ETPs;
- Expansion of position limits for listed options on BTC ETPs, allowing up to 250,000 contracts under generic limit standards.
Additionally, the US SEC issued two scheduling orders requesting public comments regarding the Division of Trading and Markets’ delegated authority approvals for exchange proposals to list and trade two large-cap crypto-based ETPs.
The orders take immediate effect following the 29 July 2025 vote. Their adoption is intended to lower costs, improve operational efficiency, and provide broader transactional flexibility for market participants interacting with crypto ETPs.
