SEC delays decisions on several crypto ETFs amid work on streamlined approval process
The Securities and Exchange Commission (SEC) delayed decisions on nine crypto exchange-traded fund (ETF) applications on Aug. 18.
The delays extended review periods for products related to digital assets, spanning Bitcoin, XRP, Litecoin, and Dogecoin. The reason is likely the agency’s work to establish a comprehensive digital asset framework.
The postponements affect Truth’s spot Bitcoin and Ethereum ETF, CoinShares’ spot Litecoin ETF, and multiple XRP ETF applications from 21Shares, CoinShares, Bitwise, Canary, and Grayscale.
The SEC also delayed 21Shares’ staking proposal for its spot Ethereum ETF and Grayscale’s spot Dogecoin ETF application.
Except for Truth’s filing, the delayed products all have final deadlines for October.
Framework strategy is a priority
Bloomberg ETF analysts Eric Balchunas and James Seyffart suggested in July that the delays reflect the SEC’s strategy to establish approval criteria before greenlighting individual applications.
Seyffart stated that this “might be the SEC’s way of stalling these things from becoming ETFs before they develop a digital assets ETF framework.”
He added that the framework would create “some sort of generic listing standard for what digital assets are allowed in an ETF wrapper and what criteria they’ll use.”
The approach mentioned aims to replace the current case-by-case review process, which requires each crypto ETF to secure a Commission order before listing.
The SEC has been reportedly collaborating with US exchanges since July on generic listing standards for token-based ETFs that would eliminate individual rule-change requests.
Generic approach
The proposed system would allow ETF sponsors to bypass the customary Form 19b-4 process when underlying tokens meet predetermined criteria.
Under the proposed framework, sponsors would submit registration statements on Form S-1, observe standard 75-day review periods, and list products once waiting periods conclude.
Market capitalization, on-exchange trading volume, and daily liquidity rank among the metrics under discussion.
Seyffart called the generic standard approach “very good news for the crypto ETF space,” arguing it would offer “clear rules of the road.”
Balchunas described the concept as “what everyone wants, what makes sense, and what we think will happen.”
As a result, the first altcoin-related ETF approvals might likely start only in October.
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