Simply put
- The suggested rule changes would facilitate the automatic approval of certain cryptographic ETFs.
- If these changes go through, it could lead to a quicker launch of AltCoin-based ETFs.
- Nonetheless, there are concerns that this proposal might serve “regulatory support that could promote private interests.”
Two prominent US exchanges have requested the Securities and Exchange Commission to approve changes that could greatly reduce the time needed for future crypto exchange-traded funds (ETFs) to gain approval, allowing specific products to be listed automatically, eliminating the need for individual case filings.
In a recent filing, CBOE BZX and NYSE ARCA proposed modifying the listing criteria. This would allow certain cryptographic ETFs to be listed through a thorough SEC review under Rule 19b-4, bypassing the lengthy submission process for proposed rule changes.
The exchanges argue that this method would align Crypto ETFs more closely with how traditional asset classes are treated. This applies to product-based trusted stocks tied to crypto assets such as Bitcoin and Ethereum, as long as specific criteria are fulfilled.
If these changes are approved, it could expedite the entry of products that track various other assets, including Solana, XRP, or combinations of other tokens.
Currently, equity and bond ETFs that meet certain standards can be listed without needing separate rule submissions.
By extending this framework to digital asset trusts, CBOE and NYSE ARCA aim to eliminate unnecessary regulatory barriers.
Andrew Rossow, spokesperson and CEO of AR Media Consulting, mentioned that the intention behind regulation is to enhance the speed of listings.
He added that ETF issuers now need to establish stronger protocols and enhance investor protection mechanisms concerning crypto assets.
However, the proposal doesn’t aim to broaden the types of products eligible for listing; it is merely about streamlining the approval process for those already considered permissible.
According to Rossow, this might allow for a “more selective regulatory process.” There’s a concern that by focusing predominantly on Bitcoin and Ethereum while overshadowing other digital assets, it could create a “regulatory support” environment that favors private interests.
Without a broader eligibility framework for ETFs, there exists a “dangerous reality” that could limit the true potential of other cryptographic projects, both current and future.
A response from the SEC could take several months. Authorities can approve, reject, or request modifications to the proposal, taking up to 240 days. Historically, the entire submission process for similar cases has required a full period.
As of now, Cboe BZX, NYSE ARCA, and the SEC have not responded to requests for comments.
