BlackRock's Ether ETF Gets Key SEC Acknowlegement

The U.S. Securities and Exchange Commission (SEC) has officially acknowledged in-kind redemption for BlackRock's spot-based Ethereum exchange-traded fund (ETF)

It essentially means that the regulator is currently considering the aforementioned proposal, but there is no guarantee that it will eventually be removed

The regulator also made a similar move with spot Bitcoin ETFs in January

On May 13, the regulator also delayed making a decision on in-kind redemptions for BlackRock's tremendously successful Bitcoin ETF

Notably, on the same day, BlackRock also filed to allow in-kind redemptions for its spot ETH ETF

Enabling in-kind redemptions would allow the fund to give investors actual underlying assets instead of cash when they sell their shares

The "in-kind" model is considered to be significantly more streamlined compared to the "in-cash" one, which is why the ETF products are expected to get a substantial boost in efficiency

That said, it should be that only authorized participants will be able to perform in-kind redemptions

Back in December 2023, on the verge of the eventual approval of spot Bitcoin ETFs, BlackRock caved to the SEC's demands to exclude in-kind redemptions from their ETF product (the same applies to the Ether-based one as well)

Following the departure of former SEC Commissioner Gary Gensler, Commissioner Hester Peirce stated that she was open to reconsidering in-kind redemptions. She stressed that the agency would be focused on allowing issuers to design products in a way that would be most useful for investors