FameEX Hot Topics | SEC Eases Path for Crypto ETFs with New Listing Standards

The U.S. Securities and Exchange Commission (SEC) has approved new generic listing standards that could accelerate the approval process for spot crypto exchange-traded funds (ETFs). Under these new guidelines, individual applications for crypto ETFs will no longer require a separate review, which is expected to significantly shorten the approval timelines. Previously, these processes could take several months. The decision was disclosed in SEC filings on prominent exchanges such as Nasdaq, NYSE Arca, and Cboe BZX, signaling the agency’s intent to streamline the process for listing digital asset products.

The new framework is based on Rule 6c-11, which governs the approval of exchange-traded products (ETPs). By setting clear, generic listing standards, the SEC aims to simplify the approval process for these financial instruments, making it easier and faster for new crypto ETFs to reach the market. SEC Chairman Paul Atkins voiced support for the change, asserting that these new standards would help maintain the U.S. capital markets’ leadership in digital asset innovation. According to Atkins, the move will also enhance investor choice and foster further innovation by reducing barriers to accessing crypto products in trusted markets.

The SEC’s decision has been met with enthusiasm in the cryptocurrency and financial sectors. Many industry experts, including Bloomberg ETF analyst James Seyffart, have hailed the approval as a positive step forward. Seyffart referred to the new framework as "the crypto ETP framework we’ve been waiting for" and anticipates a wave of new crypto investment products launching in the U.S. in the coming weeks and months. This move indicates the SEC’s growing acceptance of crypto products and could provide investors with more diverse opportunities to gain exposure to digital assets.

For a crypto spot ETF to be eligible for listing, it must either hold a commodity that trades on a market that is part of the Intermarket Surveillance Group, providing surveillance access, or be linked to a futures contract listed on a designated contract market for at least six months, with a surveillance-sharing agreement in place. Another pathway for eligibility exists if the ETF is already tracked by an existing ETF with at least 40% exposure on a national exchange, according to the SEC’s newly approved guidelines.

However, not everyone supports the changes. SEC Commissioner Caroline Crenshaw raised concerns about the potential risks associated with the new listing standards. She warned that the approval could result in an influx of products that have not been fully vetted for investor protection. Crenshaw criticized the SEC for passing the responsibility of thorough reviews to the market, potentially fast-tracking products that could expose investors to unproven risks. This cautionary stance underscores the tension between promoting innovation and safeguarding market stability.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.