Crypto Groups Push SEC for Tailored Rules on Novel ETFs
Crypto firms, asset managers, market makers, and consumer groups submitted competing views to the SEC on how to regulate “novel ETFs” and other exchange-traded products tied to crypto, private assets, event contracts, and leveraged strategies. The SEC asked whether existing rules are sufficient and whether registration procedures should change. Several crypto-focused groups urged regulatory parity with traditional ETFs, including extending ETF-style efficiencies to non-ETF ETPs while keeping the current definition of “investment company” unchanged. Andreessen Horowitz argued the SEC should not treat all novel ETFs alike, since crypto products, illiquid private-asset funds, and other strategies raise different risks. It also called for faster, more coordinated fund-registration and exchange-listing reviews. Other comments split on disclosure and oversight: Grayscale backed optional confidential consultations; Charles Schwab opposed full confidentiality; Chainalysis said public blockchains could improve surveillance and disclosure. Kalshi argued event-contract funds should be allowed, while Public Citizen warned that such products could mislead retail investors by packaging gambling-like exposure in an ETF format.
