Crypto asset managers and investment firms are pressing the U.S. Securities and Exchange Commission to accelerate and modify its review process for novel exchange-traded products. The proposals come as the SEC evaluates how to handle the growing number of crypto ETF applications and considers whether artificial intelligence may be contributing to similar filings being submitted in rapid succession.
Proposed Changes to SEC Procedures
Grayscale proposed allowing sponsors to submit draft registrations confidentially before public filing, arguing this could reduce competitors' incentive to quickly replicate proposed products. The firm also requested that SEC staff respond to applications within 45 days.
21Shares backed a similar confidential approach, noting that competitors can rapidly replicate information once an application becomes public. Andreessen Horowitz focused on the length of the current review process, arguing it could be shortened given that filings are submitted electronically, disclosures follow standardized formats, and similar questions recur across applications. The firm emphasized that financial markets operate on shorter timelines but cautioned that accelerating the process should not reduce the depth of SEC review.
Market Concerns and Counterproposals
Not all market participants support the proposed changes. Jane Street warned that pressure to launch ETFs quickly could result in rushed registrations and reduce sponsors' ability to consult with market makers on liquidity and fund structure. The firm proposed requiring ETFs to have at least two authorized participants at launch to facilitate share creation and redemption.
Charles Schwab opposed making registrations entirely confidential, proposing instead that any privately discussed filings must become public at least 75 days before a fund becomes effective. NYSE raised a separate concern about timing predictability, noting that SEC staff can delay a listing without providing a definite timeline while other exchanges may proceed, and requested greater clarity on these processes.
Staking Tokens and Broader Policy Questions
Beyond procedural changes, the SEC review prompted discussions about broader product structures. Multicoin Capital, the Jito Foundation, Jito Labs, and the Solana Policy Institute called on the SEC to establish rules permitting staking receipt tokens in spot crypto exchange-traded products. Staking receipt tokens represent crypto assets that have been staked to generate rewards.
Comments on the SEC's request for feedback were due August 31, though the regulator has continued posting submissions after the deadline and has not announced a timetable for further action.
