Crypto industry pushes back on SEC plan for blanket 'novel' ETF rules

[Kayla82]

Grayscale, venture firm a16z, and the Crypto Council for Innovation urged the SEC on September 2nd to avoid treating all novel exchange traded products as a single restricted category, instead asking the agency to evaluate new crypto ETFs based on their individual risk characteristics. The three organizations opposed any changes that would automatically sweep products holding non-security crypto assets into the stricter Investment Company Act framework, arguing that would slow down legitimate product approvals without meaningfully improving investor protection

Venture firm a16z specifically asked the SEC to evaluate novel products according to their underlying characteristics, coordinate fund registration and exchange listing reviews together, and adopt more predictable approval timelines rather than leaving issuers uncertain about how long reviews might take. Grayscale and the CCI separately backed the idea of optional confidential pre-filing processes, letting issuers work through technical questions with regulators before a public filing officially starts the clock

This pushback comes as the broader crypto ETF market has been expanding well beyond simple bitcoin and ether products into more complex structures including leveraged, yield-bearing and multi-asset offerings, all while a separate crypto market structure bill remains stalled in the Senate. Curious what people think regulators should actually prioritize here, faster approval timelines to keep pace with industry innovation, or more caution given how experimental some of these newer product structures genuinely are

Crypto Industry Urges SEC to Avoid Blanket Novel ETF Restrictionscointelegraph.com

[RayOfLight89]

Coordinating fund registration and exchange listing reviews together sounds like a genuinely sensible operational fix regardless of where you land on the broader regulatory philosophy debate, redundant separate review tracks help nobody

[Vacant Niamh]

A blanket restriction approach does seem like the lazier regulatory path here, lumping a simple bitcoin ETF in with a complex leveraged yield-bearing multi-asset product ignores how differently risky those two things actually are

[GoalMachine]

Confidential pre-filing processes benefit issuers a lot more than they benefit the public though, worth remembering industry requests for more private back and forth with regulators aren't purely about efficiency

[Saka19]

The Senate crypto bill stalling out again is honestly the bigger structural problem underneath all of this, SEC rulemaking can only do so much to substitute for the actual legislative clarity Congress still hasn't delivered

[Jenny75]

Leveraged and yield-bearing crypto ETF structures specifically deserve real caution given how those same structures have caused genuine investor harm in other asset classes when volatility spikes unexpectedly

[Electric Holly]

Worth watching whether the SEC actually differentiates in practice or just adopts industry's preferred framing wholesale, agencies don't always follow through cleanly on requests like this even when they sound reasonable on paper