SEC Opens Review on Bitcoin ETF In-Kind Redemptions Amid Internal Disputes Over Staking Guidance

Public Review of WisdomTree Bitcoin ETF Redemptions
The SEC has launched a public review process regarding a proposed rule change for the WisdomTree Bitcoin Fund (BTCW). The rule would allow in-kind redemptions, letting investors swap ETF shares directly for Bitcoin rather than cash. This method could provide tax benefits and lower transaction costs.
This comes as a contrast to the current cash redemption model used by most approved crypto ETFs. The SEC has allotted a 21-day period for public feedback, including comments, data, or arguments on the proposed change. The move follows similar delays around in-kind mechanisms for ETFs like BlackRock’s iShares Bitcoin Trust and the VanEck Bitcoin Trust.Internal Division on Staking Guidance
In a separate development, the SEC’s Division of Corporation Finance has issued updated guidance indicating that some crypto staking services may not be considered securities. This interpretation has been met with sharp criticism from former officials and current SEC commissioners.
They argue the new stance contradicts past enforcement actions and could create further regulatory confusion surrounding staking services and digital assets. The conflicting positions expose an apparent lack of consensus within the Commission regarding how cryptocurrencies and related services should be classified.A Shifting Regulatory Landscape
These developments underline the evolving and often inconsistent approach the SEC is taking toward cryptocurrency regulation. As legal and industry stakeholders continue to push for clarity, the Commission’s role in overseeing digital assets remains in flux, drawing increasing attention from both policymakers and market participants.