Rapid Approval of Cryptocurrency ETFs Eased by SEC Decision
The U.S. Securities and Exchange Commission (SEC) has announced new listing standards for crypto exchange-traded funds (ETFs), aiming to maximize investor choice and foster innovation by streamlining the listing process and reducing barriers to access digital asset products within America's capital markets.
According to the new standards, ETFs with at least 40% of their assets invested in a crypto that's already tracked by another ETF listed on a major U.S. exchange are eligible to list. This move is expected to significantly speed up the approval process.
The new rules also allow a crypto ETF to list quickly if it trades on an exchange that's part of the Intermarket Surveillance Group or if the underlying asset for a futures contract has been listed on a regulated market for at least six months. However, the specific names of crypto ETFs that can be listed under the new SEC rules when trading futures on an SEC-recognized exchange like Coinbase are not explicitly mentioned.
The SEC has approved conversions and applications for ETFs tracking cryptocurrencies such as Bitcoin, Ethereum, Solana, XRP, and Ada by firms including Grayscale, BlackRock, Franklin Templeton, and VanEck, indicating these types of ETFs may be among those eligible under the new framework.
The new standards do not clarify whether the approval process will be subject to any additional scrutiny or conditions. Furthermore, they do not mention any new regulations or oversight measures implemented by the SEC.
It's worth noting that exchanges that are part of the Intermarket Surveillance Group have agreements to share market data for monitoring purposes. However, these agreements are not explicitly mentioned in the new crypto ETF listing standards.
Eric Balchunas, Bloomberg ETF analyst, explained that these generic listing standards would enable crypto ETFs to launch with a fast-tracked timeline, provided they have futures on Coinbase. Coinbase currently offers futures in BTC, ETH, LTC, SOL, DOT, DOGE, ADA, AVAX, LINK, XLM, and XRP.
The story is an excerpt from the Unchained Daily newsletter. SEC Chairman Paul Atkins stated that the new crypto ETF listing standards aim to foster innovation and provide more choices for investors in the digital asset space. The new standards do not explicitly state that the listing process will be significantly speeded up, but the expectation is that the process will become more efficient. The new rules do not provide details on whether they apply to all crypto ETFs or only those trading on certain exchanges. The Intermarket Surveillance Group has systems to watch for market fraud, but it is unclear if these systems will be integrated into the new crypto ETF listing process.
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