Key Takeaways
- •The SEC has approved in-kind creations and redemptions for crypto ETPs, aiming to increase efficiency.
- •Retail staking rewards are currently not permitted for these ETPs.
- •ETPs for BTC, ETH, and SOL are now included, mirroring practices in commodity markets.
Regulatory Update on Crypto ETPs
On July 29, 2025, the U.S. SEC approved in-kind creations and redemptions for crypto ETPs, enhancing efficiency but not permitting staking rewards for retail investors.
This move aims to reduce costs and improve market efficiency for crypto ETPs, but direct reward-sharing with investors remains outside current regulatory allowances.
SEC Greenlights In-Kind Redemption for Crypto ETPs
The U.S. Securities and Exchange Commission has approved in-kind redemptions for crypto ETPs as of July 29, 2025. This change intends to improve market functions and reduce costs.
The decision affects major assets like Bitcoin, Ethereum, and Solana. U.S.-based crypto ETPs have now gained parity with commodity ETPs through this regulatory update.
Investors to Benefit from Lower Transaction Costs
Investors may benefit from lower transaction costs and greater market efficiency. SEC officials assert these improvements will lead to broader market dynamics.
Despite the changes, crypto ETPs still cannot share staking rewards with retail investors. Market experts indicate this may be a future consideration as the regulatory framework evolves.
No Precedent for Retail Staking Rewards Yet
In the past, spot BTC and ETH ETPs required cash-only mechanisms, leading to inefficiencies. The new in-kind order now aligns with practices in the commodity ETP sphere. Paul S. Atkins, Chairman, SEC, remarked, “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.”
While the regulatory landscape is evolving, there is no precedent for retail staking rewards via ETPs in the U.S. Future decisions could impact this capability depending on SEC directives.