Crypto Firms Push SEC for Faster, More Confidential ETF Review Process

Several major crypto asset managers, including Grayscale and 21Shares, are urging the Securities and Exchange Commission to allow confidential draft registrations for proposed exchange-traded products before they become public. The request comes as regulators reconsider how they handle newer, more complex ETF applications, particularly amid concerns about firms submitting nearly identical filings in rapid succession.

Companies argue that a confidential filing option would reduce the incentive for competitors to copy publicly available applications, while also requesting that regulatory staff commit to responding within a set timeframe. Another prominent crypto investment firm echoed calls for a faster review process overall, pointing out that filings are now largely standardized and submitted electronically, though it emphasized that speeding up reviews should not come at the cost of thorough oversight.

Market Makers Raise Concerns Over Rushed Launches

Not all industry participants support a faster process. One major trading firm warned that rushing ETF launches could leave sponsors with less time to coordinate with market makers on fund structure and liquidity, and proposed requiring new funds to have at least two authorized participants before launching. A major brokerage firm also pushed back against making the entire filing process confidential, suggesting that any confidential discussions should still become public well before a fund officially launches.

Additional Requests Target Staking and Exchange Rules

Beyond timeline concerns, some firms are requesting broader regulatory changes, including allowing certain staking-related tokens to make up a significant portion of holdings within spot crypto investment products. Exchange operators have also asked for clearer timelines when handling novel product listings, noting that regulators can currently delay a listing without providing a definitive resolution date.

The public comment period on these proposed changes closed at the end of August, though the SEC has not indicated when it plans to take further action.