The U.S. Securities and Exchange Commission (SEC) has officially extended its decision deadline regarding in-kind redemptions for Bitwise’s spot Bitcoin and Ether exchange-traded funds (ETFs) listed on NYSE Arca.
The extension was announced in a filing published Wednesday, with the SEC citing the need for more time to assess the proposal and issues raised.
The decision relates specifically to whether investors will be allowed to redeem ETF shares for the underlying assets, Bitcoin or Ether, rather than cash.
This method, known as in-kind redemption, could carry different tax treatment and has become a point of focus for ETF issuers and regulators.
The SEC stated that while the original limit for a ruling is 45 days, it can extend the timeline up to a maximum of 90 days. “The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change, and the issues raised therein,” the filing noted.
Bitwise, one of the leading digital asset managers in the U.S., has been at the forefront of crypto-based ETFs, and its filings often serve as a bellwether for regulatory sentiment.
This delay follows a pattern of extended timelines and reviews from the SEC regarding crypto products. Earlier this month, attorneys representing Grayscale Investments criticized the SEC for delaying a ruling on the company’s Digital Large Cap ETF.
Although the product had already received approval, the SEC’s Office of the Secretary halted progress by choosing to conduct an internal review, a move Grayscale claims violates statutory deadlines.
Since the change in SEC leadership under Chair Paul Atkins, appointed during the Trump administration, there has been a notable shift in how the commission approaches digital assets.
Atkins has taken a more open stance, and he describes this tokenization as an innovation the marketplace should embrace.
In a recent statement, Atkins said the SEC is moving away from past practices of “regulation through enforcement” and instead aims to establish clear guidelines that promote growth and product development in the crypto sector. No final decision date has been announced.
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