Crypto industry groups lobby SEC to preserve existing fund classifications and expedite reviews for novel ETF products.
Regulation & Gov ·
The Crypto Council for Innovation, Andreessen Horowitz, Grayscale, and other industry participants submitted comments to the Securities and Exchange Commission urging it to extend regulatory efficiencies granted to ETFs to other exchange-traded products and to avoid broadening the statutory definition of investment company under the 1940 Act. The submissions, filed on the deadline in response to the SEC's June request for feedback on novel ETFs, argued that different product categories—spanning crypto, private assets, and leveraged strategies—warrant differentiated treatment based on their distinct market structures, liquidity profiles, and investor-protection needs.
The commenters diverged on several mechanics. A16z proposed tighter coordination between fund-registration and exchange-listing reviews, calling for standardized timelines and shortened approval periods for certain products. Grayscale backed optional confidential consultations before public disclosure, while Charles Schwab countered that filings should be public for at least 75 days before taking effect. The Crypto Council for Innovation specifically sought parity between ETFs registered under the Investment Company Act and other exchange-traded structures, noting that many spot crypto products currently rely on commodity-trust structures instead.
The SEC's solicitation raised open questions about whether existing rules adequately safeguard investors and whether registration procedures need updating. Disagreement persisted among stakeholders regarding event contracts, staking arrangements, retail safeguards, and the scope of surveillance capabilities for blockchain-based products, leaving significant portions of the regulatory framework unsettled.