Crypto asset firms are pressing the U.S. Securities and Exchange Commission to create a faster and more predictable route for exchange-traded products that use novel structures, with several companies seeking confidential draft reviews before filings become public. The requests emerged in comment letters responding to the SEC’s review of its procedures for “novel” ETFs, a category that can include products with unfamiliar assets, strategies, or operational features.
Grayscale Investments asked SEC staff to provide substantive responses within 45 days and to accept optional confidential draft registration statements for proposed exchange-traded products, or ETPs. The company argued that private preliminary engagement could let sponsors resolve technical questions before exposing unfinished structures to competitors.
21Shares made a similar request for confidential draft submissions before public registration documents are posted. Both firms are seeking a process already used in some conventional securities offerings, where issuers can receive regulator feedback while refining disclosures and product mechanics.
The debate places a practical obstacle in front of crypto fund sponsors: the market may move quickly, while the regulatory process can leave a proposed product visible for months before it has a clear path to launch. Confidential reviews could reduce that exposure, though they would also delay public access to the details of products seeking eventual listing.
Calls for faster reviews without narrower scrutiny
Andreessen Horowitz, the venture capital firm known as a16z, also called for shorter SEC review periods. Its submission pointed to electronic filings, standardized disclosure templates and recurring questions across similar products as reasons the Commission could process applications more efficiently.
The firm did not ask the SEC to reduce the scope of its examination. Instead, it proposed a more streamlined system for handling applications whose underlying legal and operational issues have already been addressed in previous filings.
The SEC’s own request for comment indicates that it is examining strains in the current framework. The agency asked whether artificial intelligence may be contributing to a rapid influx of “largely identical” novel ETF applications. That question reflects a concern that automated drafting tools could make it easier for sponsors to produce numerous variants of an existing proposal, potentially adding to staff workloads without necessarily expanding product choice.
A shorter timetable would be particularly consequential where multiple issuers pursue similar crypto products. ETF launches often reward early entrants that establish trading volume, market-maker relationships and brand recognition before rival funds arrive. The industry comments suggest sponsors want the SEC to distinguish between genuinely new structures requiring extensive scrutiny and near-duplicate filings that may be resolved more quickly.
Market makers urge caution on launch pressure
Jane Street, a major ETF market-making firm, offered a different warning. The company said pressure to bring a fund to market rapidly can produce rushed registration statements and reduce the time sponsors have to consult market makers about a fund’s structure, creation-and-redemption process, and expected liquidity.
Authorized participants are financial institutions that create and redeem ETF shares, a process designed to keep a fund’s trading price close to the value of its underlying holdings. In crypto-linked products, that mechanism can require careful planning because custody, trading hours, pricing sources and liquidity conditions may differ from those used by traditional stock and bond ETFs.
Jane Street proposed that ETFs be required to begin trading with at least two authorized participants. The proposal aims to avoid reliance on a single firm for the share-creation process, which could leave a new fund more vulnerable if that participant withdraws or faces operational constraints.
Its position illustrates a tension running through the comment process. Sponsors want faster decisions and protection for proprietary structures, while market intermediaries are focused on whether an accelerated route might leave insufficient time to test how a fund will trade under real market conditions.
Dispute over confidential filings and public disclosure
Charles Schwab opposed a fully confidential filing system. The brokerage and asset-management company said that if an ETF is developed through private discussions with SEC staff, the related filing should become public at least 75 days before the fund takes effect.
That condition would preserve a period for market participants and the public to examine a proposed product before launch. Public filings can reveal details including a fund’s investment objective, fee structure, custody arrangements, conflicts policies and risks. In the case of crypto ETPs, they can also show how the sponsor plans to value digital assets, select trading venues and manage blockchain-specific events such as forks or network disruptions.
The Crypto Council for Innovation, an industry advocacy group, took the opposing view on early disclosure. It argued that the existing framework can allow competitors to replicate innovative product structures before the originating sponsor has a reasonable opportunity to launch. Its letter urged the Commission to give applicants greater protection for proprietary designs during the earliest stages of review.
The two positions outline the SEC’s central procedural choice: how to create room for genuine product development without turning confidential review into a way to limit transparency around funds that may soon be available to the public.
Staking receipts become part of the ETP debate
Multicoin Capital used its response to seek permission for qualifying staking receipt tokens to be held in spot crypto ETPs. Such tokens represent assets committed to a proof-of-stake network and may reflect the holder’s claim on staked tokens and related rewards.
Multicoin said staking receipt tokens could potentially account for substantially all of a crypto ETP’s digital-asset holdings. Jito Labs, the Jito Foundation and the Solana Policy Institute joined Multicoin in a separate joint submission supporting rules that would allow spot crypto products to use these instruments.
The request reaches beyond filing mechanics. A spot ETP holding a staking receipt rather than simply holding unstaked tokens would need clear rules on custody, reward treatment, redemption rights, smart-contract risks and the relationship between the receipt’s price and the underlying crypto asset. Those questions could make such products harder to fit into a standardized review process, even if the SEC shortens timelines for more familiar structures.
Exchanges seek predictable listing decisions
The New York Stock Exchange asked the SEC for clearer schedules once novel products are ready for exchange listing. NYSE said SEC staff can ask an exchange to delay a listing while a particular issue is considered, without providing a firm timeline. The exchange argued that uncertainty can be especially difficult if another venue may be able to proceed with a similar product.
The SEC accepted comments through Aug. 31 and has continued to post submissions dated after the deadline. It has not announced when it will propose rule changes or whether it will adopt any of the recommendations.
The letters show that the next phase of crypto ETP competition may turn as much on regulatory process as on the assets inside the funds. Faster treatment for repeat applications could reduce administrative delays, while stricter requirements for public disclosure, authorized participants and staking structures would shape which products can reach exchanges in the first place.
For deeper context on evolving U.S. crypto oversight, explore our guide on crypto regulation in the US today.
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