Prominent crypto companies are advocating for the SEC to accelerate ETF reviews and adjust processes, amid concerns about approval speed and transparency.
Major crypto firms like Grayscale, 21Shares, and a16z are calling on the U.S. Securities and Exchange Commission (SEC) to speed up the evaluation process for exchange-traded funds (ETFs) and adjust the registration procedures.
Grayscale has suggested that the SEC allow companies to submit draft documents for ETFs confidentially before they are publicly disclosed. This change, they argue, would help prevent competitors from replicating applications. Furthermore, Grayscale advocates for the SEC to provide responses to inquiries within a 45-day timeframe.
Similarly, 21Shares has echoed these proposals. The SEC recently sought input regarding the impact of artificial intelligence on the influx of largely similar ETF applications.
a16z has also pressed for shorter review times, citing the efficiency of electronic submissions and the repetitive nature of questions from the SEC. They emphasized the need for speed while ensuring thorough reviews remain intact.
Concerns About Hasty Approvals
Contrasting these calls, representatives from Jane Street cautioned that rushing the approval process could lead to insufficient scrutiny, which might compromise fund structure and liquidity. They recommend that any new products should be introduced with at least two authorized participants involved.
Charles Schwab voiced opposition to a completely confidential process, insisting that any discussions between the SEC and sponsors should result in public disclosure at least 75 days before any action is taken.
Broader Industry Suggestions
Other firms have proposed wider-ranging ideas related to crypto funds. Multicoin Capital has suggested that liquid staking tokens should be permitted for use in spot crypto ETPs, which could encompass a significant portion of digital asset volumes.
In partnership with Multicoin, Jito Labs, the Jito Foundation, and the Solana Policy Institute have urged the SEC to establish regulations governing the use of staking assets in spot crypto products. Meanwhile, the NYSE has called for more predictable review timelines, as the current process can lead to delays without clarity when similar investigations are ongoing.
Comments on the SEC's proposals were due by August 31. However, the SEC has continued to release materials beyond this deadline without outlining specific future steps. Notably, the SEC recently announced new rules for the crypto market, titled Regulation Crypto Assets, which aim to streamline capital raising via tokens and offer a "safe harbor" for certain digital assets.
