The Securities and Exchange Commission (SEC) has pushed back its deadline for making decisions regarding the redemption of funds (ETFs) on two different crypto exchanges.
As stated in a recent update, regulators are taking more time to determine whether to approve physical redemptions for Bitwise’s Bitcoin (BTC) and Ether (ETH) spot ETFs on NYSE ARCA. This means the decision timeline has been extended, with a new limit set to be “45 days or less than 90 days.”
“The Committee thinks it’s appropriate to allow extra time for action to consider the proposed rule changes and the related issues,” the announcement indicated.
Physical property redemption enables investors to directly exchange the ETF for the actual assets—in this case, Bitcoin or Ether.
This method can have tax implications since assets are redeemed in their tangible form, rather than being sold for cash.
This isn’t the first time the SEC has extended deadlines regarding cryptocurrency decisions. Earlier this month, for instance, a digital asset manager, Grayscale, complained about the SEC’s delay in approving a large-cap digital ETF.
Although the SEC had previously approved the product, they re-evaluated following a lawsuit, which halted the decision process. Grayscale’s legal team argued that this was a violation of the expected timelines for approval or disapproval and went against established procedures.
In light of recent events, the SEC seems to be shifting its approach to cryptocurrency. The new leadership in Washington has influenced a change in the regulator’s perspective on crypto. Recently, Paul Atkins, who took over the role previously held by Gary Gensler, mentioned that regulators now view tokenization as a “innovation” that should be encouraged in the market.
He pointed out how his vision differs from that of his predecessors, stating that previous SEC policies often stifled innovation due to vague regulations and enforcement strategies.
Atkins aims for regulatory clarity in relation to cryptocurrency, hoping to build a framework that fosters innovation and facilitates new products.
