Incoming SEC Chairman Paul Atkins is expected to ease restrictions on crypto-related ETFs.
Disputes over in-kind settlements may be resolved by offering investors cryptocurrency payouts.
Broader regulatory challenges like Operation Chokepoint 2.0 have pressured crypto-focused firms, calling for federal policy reevaluations.
The US Securities and Exchange Commission (SEC) is preparing for changes as incoming Chairman Paul Atkins assumes office in January.
Commissioner Hester Peirce has indicated that the transition could lead to a more favourable stance on stalled crypto-related applications, including Bitcoin and Ethereum ETFs.
Hester Peirce expressed confidence in a more streamlined decision-making process with a new SEC majority.
In an interview with Coinage Media, she addressed the feasibility of in-kind spot Bitcoin and Ethereum ETFs under the incoming administration. Previous disagreements under Gary Gensler’s leadership centered on settlement methods.
https://twitter.com/coinage_media/status/1870084709503643873
The Gensler-led SEC favoured cash settlements, where payouts are made in US dollars. However, issuers advocated for in-kind settlements, which allow investors to receive payouts in the underlying cryptocurrency.
This method is seen as offering better value for investors. Peirce also noted the potential for staking features in Ethereum ETFs, which could provide additional yield to investors.
Despite regulatory resistance to staking features, some firms are preparing for potential approvals. Bitwise, for instance, acquired Attestant, a staking service provider, to expand offerings for Ethereum ETF clients. The acquisition reflects the industry’s anticipation of more flexible policies under the new SEC leadership.
The expected changes at the SEC come amid broader regulatory challenges for the crypto industry. Operation Chokepoint 2.0, an alleged federal initiative, has drawn criticism for pressuring banks to limit services to crypto companies.
This initiative has impacted firms like Silvergate Bank, which ceased operations, and Custodia Bank, which faces operational constraints.
Crypto advocates, including David Sacks, are calling for an investigation into Operation Chokepoint 2.0. Industry leaders believe federal policies beyond the SEC also require attention to support the crypto market’s growth.
