On June 3, the cryptocurrency task force of the U.S. Securities and Exchange Commission (SEC) held a meeting with representatives of CoinShares International Limited and legal advisors Chapman & Cutler LLP. The primary objective of the meeting was to discuss legal challenges in issuing digital asset exchange-traded products (ETPs) in the U.S. market, a field full of potential but also containing many legal and regulatory barriers.
The discussion focused on several core issues. First was the integration of a pledge mechanism into the ETP structure, aimed at ensuring transparency and security of digital assets throughout the operational process. Additionally, the parties continued to examine appropriate standards for applying rule changes to new cryptocurrency ETP products, helping to clarify operational mechanisms and protect investor interests.
Other notable points discussed included digital asset custody, comparing the effectiveness between physical and cash redemption mechanisms in ETP products, and the feasibility of registered investment companies participating in cryptocurrency ETP investments. These topics reflected a deep concern for ensuring safety and transparency in the development of new financial cryptocurrency products in the U.S. ecosystem.
CoinShares also detailed their cryptocurrency ETP business in Europe, where the asset management company oversees over $6 billion. With more than 20 publicly listed ETP products covering 13 digital assets and 3 cryptocurrency indices, the company affirmed the scale and diversity of its investment portfolio. This both demonstrated its product operation capabilities and provided a valuable reference for the U.S. market in validating and establishing standards for cryptocurrency ETPs.
The conversation between the SEC and CoinShares opens up significant prospects for the sustainable development of cryptocurrency ETP products, contributing to shaping a digital financial ecosystem in the U.S. that is both innovative and strictly compliant with legal regulations. This is also an important stepping stone to attracting social Capital into the cryptocurrency market, while reducing potential risks from operating unregulated and non-transparent cryptocurrency Investment Vehicles.
