U.S. SEC Postpones Verdict on Fidelity's Spot Bitcoin (BTC) and Ethereum (ETH) ETF Proposal

# SEC Delays Decision on Fidelity’s In-Kind Redemption Proposal for Spot Bitcoin and Ethereum ETFs The U.S. Securities and Exchange Commission (SEC) has postponed its decision on Fidelity's proposed in-kind redemption mechanism for its spot Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs), as reported by CoinGape on October 23. This move is part of a broader series of delays by the SEC in reviewing proposals from multiple issuers striving to enhance the operational efficiency of cryptocurrency ETFs. # Fidelity’s Push for In-Kind Redemption Mechanism Faces Regulatory Delay Fidelity, a premier asset manager, is seeking to introduce an in-kind redemption mechanism within its ETFs. This feature allows authorized participants to redeem ETF shares for the underlying cryptocurrency assets directly, rather than for cash. Widely used in traditional ETFs, this mechanism offers benefits such as reduced transaction costs and improved tax efficiency. Although the SEC recently reviewed a similar proposal for BlackRock’s spot Ethereum ETF, it has not yet made a ruling on Fidelity’s spot Bitcoin and Ethereum ETF proposals. The regulatory agency has not provided a timeline for when a final decision might be expected. # Broader Delays Extend to Other Key Players Fidelity is not the only entity experiencing regulatory delays from the SEC. Earlier this year in April, the SEC postponed its decisions on in-kind redemption proposals for Bitcoin and Ethereum funds managed by other major issuers, including WisdomTree’s Bitcoin Fund (BTCW) and Ethereum Fund (ETHW), as well as VanEck’s Bitcoin Fund (BITB). These ongoing delays underscore the SEC’s cautious stance on approving new mechanisms and products within the cryptocurrency ETF space, reflecting the complexities associated with regulating the rapidly evolving digital asset market. Industry participants continue to await further clarity on the progression of these proposals.