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The U.S. Securities and Exchange Commission (SEC) has yet to reach a definitive decision on the implementation of two significant features related to spot cryptocurrencies. The regulatory body has postponed its decision on the in-kind redemption (asset exchange redemption) for Bitcoin and Ethereum funds proposed by WisdomTree and VanEck, as well as the acceptance of staking features for Ethereum Trust products suggested by Grayscale.
The SEC has delayed its decision regarding the in-kind redemption for WisdomTree and VanEck funds. Furthermore, the timeline for Grayscale’s staking proposal has been reset, extending the review period for the application. The regulatory agency is expected to clarify its decision on in-kind redemption for Bitwise and WisdomTree products by June 3, with the decision on Grayscale’s staking proposal anticipated by June 1.
Additionally, five different fund providers have resubmitted their applications for the Fidelity Ethereum Fund and Franklin Ethereum ETF at the Cboe exchange in March. Although the SEC previously denied staking applications for spot Ethereum funds, there is speculation that the newly appointed chairman, Paul Atkins, may consider policy changes regarding these applications in the coming months.
On the other hand, regions like Hong Kong, Canada, and Europe have approved staking applications, but it is known that this will not directly pressure the SEC. Experts believe that the SEC will operate at its own pace, suggesting that external factors may have limited influence on its regulatory decisions.
James Seyffart: “The SEC may learn from the practices of other regulators; however, it will progress at its own speed.”
These delays create uncertainty regarding the implementation of strategic features that fund providers wish to add to their products. As investors and market observers closely follow the SEC’s decision-making process, it is suggested that the agency could adopt a more flexible approach under its new chairman.
Moreover, the intended in-kind redemption and staking applications for the products are significant for diversifying investment strategies and potentially enhancing returns. The final decision of the agency regarding these applications will play a crucial role in defining innovative financial products in the market.
In evaluations, the SEC continues to show a tendency to examine both local and international examples in its process management while considering the practices of other regulatory institutions. This indicates that the applications related to the products may gain clarity in the future.
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