SEC seeks feedback for in-kind redemptions on BlackRock’s Bitcoin ETF, delays Solana and Dogecoin proposals

The U.S. Securities and Exchange Commission has pushed back its deadline for whether to allow in-kind redemptions for BlackRock's bitcoin exchange-traded fund.

The SEC is now asking for public comments on that proposal, according to a filing made on Tuesday. Nasdaq posted an amended rule filing in January that would allow for redemptions and creations in kind for the iShares Bitcoin Trust.

"The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act9 to determine whether the proposed rule change should be approved or disapproved. Institution of proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change," the agency said on Tuesday.

The SEC allowed BlackRock's bitcoin ETF, along with others, to begin trading in January 2024. Ahead of that approval, firms were hashing out technical details over how the redemption process would work for such a product. The SEC favored a cash model that required BlackRock to move bitcoin out of storage, sell it right away, and then give the cash back to the investor.

If approved, ETFs could trade more efficiently, Bloomberg Intelligence ETF analyst James Seyffart said earlier this year in a post on X.

The SEC is also weighing dozens of proposals for new crypto ETFs. On Tuesday, the agency also delayed proposals for the Grayscale Litecoin Trust and the Grayscale Solana Trust , and asked for public comments. The agency also asked for public comments for the 21Shares Dogecoin ETF on Tuesday.

The agency is likely to take an overall friendlier approach to crypto ETFs than in the prior administration. Since President Donald Trump took office in January, the SEC has dropped several lawsuits against crypto firms and has held public crypto roundtables to discuss how to regulate the industry. New SEC Chair Paul Atkins unveiled his vision for crypto regulation on Monday at a crypto roundtable, while criticizing the agency's previous approach.