Crypto firms urge SEC to speed ETF reviews and allow confidential draft filings

Grayscale, 21Shares and venture firm Andreessen Horowitz's a16z are among the crypto and technology firms pressing the U.S. Securities and Exchange Commission to shorten its review of "novel" exchange-traded products and allow sponsors to file draft registrations confidentially, according to comment letters submitted to the regulator.

Grayscale said an optional confidential process would reduce the incentive for competing sponsors to submit imitative or duplicative filings. The asset manager also asked SEC staff to commit to responding within 45 days. 21Shares made a similar request, noting how quickly competitors can copy public filings. The SEC had sought input on whether artificial intelligence may be contributing to a wave of novel ETF applications that are "largely identical."

A16z also backed a shorter review, arguing filings are now submitted electronically, disclosures are largely templated and the same questions recur across products. Markets move on a shorter timeline than the existing review period, it said, though a faster process should not mean "a lighter review."

Not all respondents agreed. Jane Street warned that pressure to bring an ETF to market quickly can lead to rushed registrations and leave sponsors with less time to gather feedback from market makers on fund structure and liquidity. It proposed requiring ETFs to launch with at least two authorized participants. Charles Schwab opposed a fully confidential process, saying that if the SEC holds confidential discussions with a sponsor, the filing should become public at least 75 days before the fund takes effect.

Other firms sought changes beyond timelines. Multicoin Capital asked that qualifying staking receipt tokens be allowed in spot crypto ETPs, potentially making up substantially all of their digital asset holdings. Jito Labs, the Jito Foundation and the Solana Policy Institute joined Multicoin in calling for rules allowing staking receipt tokens in spot crypto products.

NYSE asked for more predictable timelines when novel products reach exchanges, saying SEC staff can currently ask an exchange to delay a listing without a firm timeline even when another exchange could proceed. Comments were due Aug. 31, though the SEC has continued to post later submissions. The regulator has not set a timeline for further action.