The U.S. Securities and Exchange Commission (SEC) has made a significant move towards expediting the approval process for commodity-based crypto exchange-traded funds (ETFs). In a recent announcement, the SEC approved new generic listing standards that will streamline the application process, allowing for quicker access to the market for various digital asset ETFs.
This decision, disclosed in filings concerning major stock exchanges such as Nasdaq, NYSE Arca, and Cboe BZX, introduces changes under Rule 6c-11. The new framework eliminates the requirement for individual assessments of each application, which has previously resulted in lengthy waiting periods, often extending for several months. SEC Chair Paul Atkins emphasized the importance of this development, stating, “By approving these generic listing standards, we are ensuring that our capital markets remain the best place in the world to engage in the cutting-edge innovation of digital assets.”
The SEC’s approval is particularly pertinent given the growing number of pending spot ETF applications for significant cryptocurrencies, including Solana (SOL), XRP (XRP), Litecoin (LTC), and Dogecoin (DOGE). As deadlines loom starting in October for these pending applications, the new standards are expected to pave the way for a wider array of digital asset investment options in the U.S. market.
Industry experts have reacted positively to this announcement. Bloomberg ETF analyst James Seyffart described it as the long-awaited framework for crypto exchange-traded products (ETPs), anticipating a surge of crypto investment products launching in the upcoming weeks and months.
Under the newly established rules, to qualify for listing, a crypto spot ETF must either hold a commodity that is traded on a market linked with the Intermarket Surveillance Group and have surveillance access or be underpinned by a futures contract listed on a designated market for no less than six months with a surveillance-sharing agreement. Alternatively, a fund may be eligible for listing if it is already tracked by an ETF that holds at least 40% exposure on a national securities exchange.
While the SEC’s new standards are being hailed by many as a major advancement for the crypto industry, not all voices within the SEC echo this sentiment. Commissioner Caroline Crenshaw has raised concerns regarding investor protection, warning that the approval of generic standards might lead to an influx of products entering the market without thorough vetting. “The Commission is passing the buck on reviewing these proposals and making the required investor protection findings, in favor of fast tracking these new and arguably unproven products to market,” she expressed.
This highlights a growing tension within regulatory bodies regarding the pace of innovation versus the necessity for consumer protection in the evolving landscape of digital assets. As the SEC continues to navigate these challenges, the approval of generic listing standards represents a significant step towards making crypto ETFs more accessible to investors while also raising essential questions about the adequacy of regulatory oversight.
In summary, the SEC’s decision to streamline the ETF approval process marks a pivotal moment for the cryptocurrency market. As both new and existing players prepare to respond to these changes, the landscape for crypto investment products in the United States is on the cusp of transformation.
