Catenaa, Wednesday, May 14, 2025-The US Securities and Exchange Commission (SEC) on Tuesday invited public comment on a proposal that would allow in-kind redemptions for BlackRock’s bitcoin exchange-traded fund, while delaying decisions on several other crypto ETF applications.
The agency’s move follows a rule change request filed by Nasdaq in January to permit the iShares Bitcoin Trust to facilitate redemptions and creations in-kind – meaning bitcoin could be exchanged directly instead of converting to cash.
Currently, redemptions are limited to a cash model, which requires BlackRock to sell bitcoin before reimbursing investors.
In its Tuesday filing, the SEC said it was opening proceedings under Section 19(b)(2)(B) of the Securities Exchange Act to evaluate the legal and policy implications of the proposed changes.
The review process could potentially streamline ETF operations if in-kind transactions are approved.
Bloomberg ETF analyst James Seyffart previously noted that such a shift would improve the trading efficiency of spot bitcoin ETFs.
Also on Tuesday, the SEC postponed decisions on other crypto-linked products. Proposals from Grayscale for Litecoin and Solana trusts were delayed, as was the 21Shares Dogecoin ETF. The agency requested public input on each, signaling continued deliberation amid increased institutional interest in crypto.
The delays come as SEC Chairman Paul Atkins pushes a more open stance on digital assets, reflecting the agency’s pivot since President Donald Trump took office in January. Atkins recently criticized the agency’s prior approach and introduced a new regulatory vision during a crypto roundtable this week.
