A coalition of crypto firms and consumer advocacy groups is urging the Securities and Exchange Commission (SEC) to establish customized regulations for a new class of exchange-traded products (ETPs), which encompass cryptocurrencies, private assets, and event contracts. This initiative comes in response to the SEC's recent request for feedback on the adequacy of current regulations and whether adjustments are needed for emerging product types.
The Crypto Council for Innovation (CCI) emphasized in their letter that non-ETF ETPs should receive regulatory advantages similar to those afforded to ETFs. They argue that applying these efficiencies would enhance innovation and provide more investment options. The CCI's stance is supported by prominent entities such as Andreessen Horowitz (A16z), Grayscale, and Charles Schwab, among others.
A16z specifically requested that the SEC maintain the current legal definition of an investment company and avoid broadly categorizing products that hold non-securities under the Investment Company Act of 1940. They highlighted the unique characteristics of crypto ETPs, which already meet exchange listing standards, and called for better synchronization between fund registration and exchange listing timelines.
