SEC opens door to additional proliferation of crypto assets: PwC
The ability to stake within ETPs will tighten the gap with the industry’s dominant bitcoin ETPs making these funds more marketable and competitive. One remaining hurdle is the lack of clarity if an ETP can maintain grantor trust status for tax while staking.
Despite the SEC’s no action letter, holding significant amounts of crypto directly in a RIC remains impractical due to income classification issues under Section 851(b)(2). Funds will still use derivatives and blockers for crypto exposure. However, this change will remove impacts of immaterial direct investment and opens doors for additional indirect or synthetic exposure.
