On July 29, 2025, the SEC approved the use of in-kind creations and redemptions by authorized participants for crypto asset exchange-traded product (ETP) shares. The SEC’s approval order applies only to ETPs that are not registered investment companies. Prior to this order, the SEC had approved the listing and trading of a number of spot Bitcoin ETPs and spot Ether ETPs in January 2024 and May 2024, respectively, however those orders only contemplated cash creations and redemptions by authorized participants. As stated by SEC Commissioner Mark Uyeda in conjunction with the SEC’s July 29 order, limiting crypto ETP authorized participants to a cash-only creation and redemption structure “forc[es] the ETP issuer to buy or sell the crypto asset on the open market. This introduces significant transaction costs, exposes the product and its investors to price slippage in the underlying asset class, and makes the ETP more expensive.”

By permitting crypto ETPs to create and redeem shares on an in-kind basis, the SEC has leveled the playing field with other commodity-based ETPs which are already permitted to create and redeem shares in-kind. In the SEC’s press release, Jamie Selway, Director of the SEC’s Division of Trading and Markets, stated that the SEC’s approval “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.”

The SEC’s approval order is available here, the SEC’s press release is available here, and Commissioner Uyeda’s statement is available here.