US Securities and Exchange Commission (SEC) Delays Decision on VanEck's Request for In-Kind Creations for the spot Bitcoin ETF application

This decision also impacts WisdomTree and extends to the spot Ethereum ETF offering. Asset managers conceded this redemption model before approving the spot Bitcoin and Ethereum ETF products last year.

The US Securities and Exchange Commission (SEC) has postponed its decision on considering applications for In-Kind creations for the spot Bitcoin ETF.

The regulator will now decide on June 3, extending the prior deadline of May 3. The SEC is also expected to announce its verdict on the spot Ethereum ETF offering from WisdomTree at the same time.

Earlier, asset managers had stated that they would prefer a standard cash creation and redemption model for the flagship cryptocurrency ETF. However, the SEC had shot down the applications.

Now, after the approval of the futures Bitcoin and Ethereum ETFs last year, the asset managers have renewed their push for the In-Kind creations.

SEC To Decide On Applications For In-Kind Creates On June 3- Report

The market regulator will decide on applications for In-Kind creation and redemption of the spot Bitcoin and Ethereum ETFs on June 3, a legal consultant has said.

Eleanor Terrett, an attorney at the firm Winston, shared on X, formerly Twitter, that the regulator’s staff has filed a brief with the administrative law judge. In the brief, they request the judge to defer to the SEC’s view that the applications should be approved.

The SEC had initially shot down the applications for In-Kind creations and redeems. In-Kind creations will see stakeholders exchange the underlying Bitcoin and Ethereum directly. This eliminates the need to first convert the funds to cash.

The US SEC had opposed this method of creation and redemption as it helps maintain liquidity and price stability. It also avoids taxable events.

“The Division maintains that, in the interest of efficient and economic use of the Commission’s resources, the applications should be granted in accordance with the SEC’s view as expressed in its statements at the March 15, 2024, open meeting,” the SEC staff said.

The regulator is expected to announce its verdict on the spot Ethereum ETF offering from WisdomTree at the same time.