New SEC policy could accelerate product launches but raises questions on investor protection
The U.S. Securities and Exchange Commission (SEC) has introduced a policy change that may shorten the path for spot crypto ETFs, a move that analysts say could reshape the retail investment landscape. The update, announced on Sept. 17, involves new listing standards for commodity-based trust shares.
Experts say the change could usher in a wave of new digital asset ETFs. Bloomberg ETF analyst James Seyffart described the development as a step toward “a wave of spot crypto ETP launches.” His colleague Eric Balchunas added that the decision essentially clears regulatory hurdles for crypto ETFs, especially those with futures structures linked to established platforms.
Seoyoung Kim, professor of finance at Santa Clara University, explained that the rule changes may cut approval times from years to months for digital assets that have not yet been individually vetted. “Of course, the would-be ETF must still comply with pre-existing standards for ETF formation, listing, and trading,” she noted.
Predictability for Issuers and Investors
According to Federico Brokate, head of U.S. business at 21Shares, the revised process means “in-scope assets” now offer greater predictability for issuers and investors. He emphasized that products meeting generic standards—such as those tied to existing futures—can move directly to exchange listing without dual applications.
Greg Benhaim, executive vice president at 3iQ, added that the framework may help retail traders differentiate between various products. “An AVAX ETF and an ADA ETF are very different, but the investor may not appreciate this fully. Over time, this will highlight which assets have real retail demand in ETF format and which don’t.”
Balancing Speed and Protection
Not everyone is convinced the shift benefits investors. SEC Commissioner Caroline Crenshaw warned that the policy risks bypassing thorough investor protection reviews. She called crypto ETFs “new and arguably unproven products”, stressing that the agency’s mission remains safeguarding investors rather than fast-tracking listings.
The debate underscores a broader tension: expanding crypto access through ETFs while ensuring investor safeguards remain intact.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.