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  • Writer's pictureStephen H Akin

Crypto ETFs

Could Crypto ETFs be allowed if transactions settle in cash?

The SEC doesn't want broker-dealers to handle cryptos directly. So bitcoin ETFs will not allow in-kind creation or redemption. Only cash will go in or out, and absolutely not actual bitcoins. S1 filings, industry discussions with regulators and exchanges appear to make headway.

The Securities Exchange Commission (SEC) has set Friday December 29, 2023 as the date issuers should complete and file their applications to be considered in the first wave. The SEC went on to say that the filings cannot mention in-kind creation or they will be rejected.

On July 27, 2023 Bill S.2669 was introduced. Democratic Senators Elizabeth Warren and Joe Manchin and Republican Senators Lindsey Graham and Roger Marshall have managed to come together to co-sponsor a bill focused on crypto crime. 

If the bill becomes law, within 18 months of its enactment, the U.S. Treasury’s Financial Crimes Enforcement Network would announce that any U.S. person with $10,000 in digital assets or one or more digital assets overseas would have to file a report. Within the same timeframe, the U.S. Treasury would establish controls to mitigate unlawful financial risks associated with digital asset mixers and anonymity-enhanced cryptocurrency. 

Download The Full Text of the Bill Here:

Download PDF • 244KB

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