Key Takeaways

• Scaramucci publicly thanked SEC Commissioner Hester Pierce for backing in-kind Bitcoin and Ethereum ETF operations.
• The new approval lets participants exchange ETF shares directly for crypto, improving efficiency and lowering costs.
• The change marks a shift from the SEC’s prior insistence on cash-based redemption models.

SkyBridge Capital founder Anthony Scaramucci issued high praise for SEC Commissioner Hester Pierce—dubbed “Crypto Mom”—after the agency approved in-kind redemption mechanisms for Bitcoin and Ethereum ETFs.

This change allows authorized participants to directly swap ETF shares for the underlying tokens, bypassing the need for cash redemptions.

In‑Kind Redemptions Mean Lower Costs & Faster Settlements

Previously, crypto ETFs required cash redemptions, often leading to delays and added transaction fees. Under the new SEC guidance, participants can redeem directly for Bitcoin or Ethereum, streamlining operations and reducing expenses—though retail investors remain excluded from the process.

SEC Chair Paul Atkins indicated the shift reflects the agency’s desire to make ETF structures more efficient and investor-friendly, especially amid growing ETF adoption across crypto assets.

Impact on ETF Industry & Investor Access

Bloomberg analyst James Seyffart noted that in‑kind redemption options may become standard in new altcoin ETFs, including iShares’ Ethereum-focused products.

This represents a marked departure from earlier SEC policy, dating back to the first approving of spot BTC ETFs in January 2024.

Final Thoughts

The SEC’s approval of in-kind ETF redemption rules marks a significant moment for crypto institutional infrastructure, enhancing efficiency and cost-effectiveness. Scaramucci’s acknowledgment underscores the influence key regulators play in shaping the market’s maturity.

Frequently Asked Questions

What are in-kind redemptions for ETFs?
They allow authorized participants to exchange crypto ETF shares directly for underlying assets like Bitcoin or Ethereum.

Will retail investors benefit?
Not directly—only authorized participants can perform in-kind redemptions.

Why is Hester Pierce praised?
She played a pivotal role in advocating for and securing approval of the new in-kind ETF redemption structure.