Replying to Avatar StackSats.IO

Can someone smarter than me explain why these ETFs sought in-kind redemptions?

Surely that would have enabled people a window in to their holdings which would make it more difficult to sell paper BTC on top.

By doing cash-only, easier to hide their corn on chain and thus easier to rehypothecate?
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djmeistro✝️ 🍊💊⚡️ 2y ago

I think you're spot on... From what I've read, it seems pretty fishy that the SEC would prefer cash redemptions over in kind unless there were underlying motives to be able to rehypothecate the actual bitcoin

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StackSats.IO 2y ago

Plausible explanation I read is that SEC doesn't trust the source of In-Kind transfer for ETF in or out. Wanting to trace all transactions from cash > BTC > ETF.

I guess that would make some sense. Gabor had some good points too but it does seem strange that this is a point of contention