THE SEC APPROVED THE CREATION AND RECOVERY OF GOODS TRADED IN THE ENCRYPTED CURRENCY EXCHANGE

The United States Securities and Exchange Commission (SEC) has approved the physical creation and foreclosure of ETPs, which means that participants are authorized to exchange their shares directly for the base of encrypted assets without the use of cash.

In its bulletin on Tuesday, the securities regulator indicated that approved bitcoin and the Taifung Fund would be allowed to be created and redeemed on a physical basis. In a statement, the Chairman of the SEC, Paul Atkins, referred to “This is a new starting point, and a key priority of my presidency is to develop an appropriate regulatory framework for the encrypted asset market”.

Atkins further stated that the new regulations would make the encryption ETP “more cost-effective”. Jamie Selway, Head of the SEC Department of Transactions and Markets, stated that “the creation and redemption of goods provided flexibility and cost savings to ETP issuers, authorized participants and investors, thus creating a more effective market”.

In the context of approved cash-encrypted currency exchange transactions funds (ETFs), in-kind redemption allows investors to receive basic assets, such as bitcoin or tavern, rather than cash, when they redeem their shares. This approach is usually considered more efficient because it allows authorized participants in the Fund to avoid selling assets on the market, which may reduce transaction costs.