ETF Store President Says Treasury’s 351 Exchange Notice May Complicate Crypto ETF Tax Setups

ETF Store President Nate Geraci said his initial reading of the U.S. Treasury Department’s latest notice on 351 exchanges is less optimistic than some voices in the industry have suggested. In his view, problems could arise when a basket of assets transferred into an ETF differs materially from the ETF’s own investment strategy. He pointed in particular to cases where those assets are then quickly reduced or fully sold through in-kind redemptions. Geraci also said the Treasury’s guidance does not clearly define the boundaries of what transactions are covered, making it difficult at this stage to determine which structures or operations may be permitted. He expects additional guidance to follow as the issue develops.