SEC Preps Big Rule Shift for All Spot Crypto ETFs

Key Points:

• SEC aims to replace Form 19b-4 with a single rule for all crypto ETF listings.
• New guidance signals broader support for including crypto assets in traditional investment products.
• Asset managers prepare new ETFs as SEC finalizes framework for faster spot crypto approvals.

SEC Preps Big Rule Shift for All Spot Crypto ETFsUS SEC is preparing new rules that could speed up the approval process for spot cryptocurrency exchange-traded funds (ETFs). A recently released 12-page guidance document outlines the first step in a broader framework aimed at standardizing how crypto-based ETFs are reviewed and approved.

According to Reuters, the agency is working on creating a general rule that would apply to all spot crypto ETF listings, removing the need for exchanges to file individual exemption requests through Form 19b-4 for each product. This move could reduce the wait time for new product launches from around 240 days to as few as 75.

New ETF Guidelines Signal Changing Approach at the SEC

The document released last Tuesday marks a shift in how the SEC, under Republican leadership, is addressing crypto-related financial products. The agency has also formed a new task force focused on drafting future regulations, reassigned members of its enforcement team, and paused or ended several ongoing crypto enforcement actions.

Sui Chung, CEO of CF Benchmarks, said the SEC appears focused on creating a system for including multiple crypto assets in investment products

“The SEC is moving forward on creating a framework for how they’d like to see all these crypto assets included in investment funds,” he stated.

Further guidance from the SEC’s trading and markets division is expected. That document may set a new path for standardizing listings, making it easier for asset managers to bring new crypto ETFs to market.

Industry Response and Ongoing Talks

According to individuals familiar with the matter, the SEC is in active discussions with exchanges regarding the wording of the new rule. One executive said,

“The SEC is looking for a general rule it can apply to all listings, and currently is going back and forth on precise wording with the exchanges.”

Submissions from exchanges on this matter are expected in the coming weeks.

Source: Nate Geraci/XOfficials from Nasdaq and Cboe declined to comment. The New York Stock Exchange and the SEC also did not provide a response when contacted about these talks.

Matt Hougan, CIO of Bitwise Asset Management, commented on the new guidance, saying,

“The most interesting and important thing about this guidance is that it exists.”

Hougan said the move signals recognition that crypto ETFs are now part of mainstream finance.

Asset Managers Plan Ahead as New Products Emerge

While the new rules are still in progress, some firms are launching crypto-related products using alternative structures. As CoinCu reported, REX Financial and Osprey Funds recently introduced a new Solana-linked ETF that avoids current restrictions by investing in a separate entity holding Solana and a non-U.S. Solana fund.

Greg King, CEO of REX Financial, explained:

“We do think the SEC is taking big steps forward in dealing with cryptocurrency, but it’s still the SEC, and not everything has been codified yet.”

The fund brought in $12 million on its first day of trading. King confirmed plans to pursue a spot Solana product once the new SEC framework is complete.

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