The SEC has announced the start of a public consultation regarding the implementation of 'in-kind' within the WisdomTree Bitcoin Fund. This initiative marks a change in the agency's approach to regulating crypto ETFs.
Discussion of 'In-Kind' for WisdomTree Bitcoin Fund
On June 2, the SEC opened a public comment period on a proposal from the Cboe BZX Exchange concerning rule changes for the WisdomTree Bitcoin Fund. This allows for the creation or redemption of shares 'in-kind', meaning directly in bitcoin without cash. The SEC stated that 'the institution of procedures is appropriate given the legal and political stakes involved.'
Strategic Shift at SEC and Its Implications
Should the SEC approve the 'in-kind' implementation, this will not only be a symbolic, but also an operational turning point that would enhance the liquidity of crypto ETFs. It would facilitate institutional investors managing their assets at lower costs with greater transparency. This move also indicates acknowledgment of the maturity of crypto-related products.
Impact of the Discussion on Future Regulatory Policies
The SEC encourages the public to comment on the alignment of these proposals with Section 6(b)(5) of the Securities Exchange Act. The outcomes of this discussion are expected to have a lasting impact on U.S. regulatory strategy on crypto ETFs. However, despite the open stance, the SEC insists on the necessity of guarantees for investor protection and prevention of market manipulation.
In conclusion, the SEC is showcasing a new approach to engaging with the cryptocurrency market, albeit with caution. The open consultation on 'in-kind' implementation may signal the beginning of deeper reforms in the regulation of crypto ETFs.
