US SEC delays decision on Fidelity's bailout for Bitcoin, Ethereum ETFs as crypto ETF proposals face extended review
The US Securities and Exchange Commission (SEC) has postponed its decision on Fidelity's application for spot bitcoin and ethereum exchange-traded funds (ETFs).
The decision comes as issuers in the crypto industry continue to seek approval for features aimed at improving ETF operations and efficiency.
SEC Suspends Fidelity's In-Kind Redemption Feature
Fidelity is among several major asset managers that have filed to allow in-kind redemptions in their spot cryptocurrency ETFs.
In-kind compensation allows authorized participants to exchange ETF shares directly for underlying crypto assets instead of cash.
These mechanisms are commonly used in traditional ETFs to minimize trading costs and tax consequences.
While the SEC recently granted a similar request from BlackRock regarding its spot Ethereum ETF, it has decided to delay Fidelity's proposals for both Bitcoin and Ethereum ETFs. The regulatory agency has not provided a timeline for when a final decision might be made.
Fidelity is not the only issuer facing delays. In April, the SEC also postponed rulings on similar compensation proposals by WisdomTree for its Bitcoin Fund (BTCW) and Ethereum Fund (ETHW), as well as VanEck's Bitcoin Fund (BITB).
