tl;dr
The SEC delayed decisions on nine crypto ETF applications on August 18, extending reviews for products linked to Bitcoin, XRP, Litecoin, and Dogecoin. This delay aligns with the SEC's efforts to create a comprehensive digital asset regulatory framework. The postponed products include Truth’s spot Bi...
The Securities and Exchange Commission (SEC) delayed decisions on nine crypto exchange-traded fund (ETF) applications on August 18, extending the review periods for products associated with digital assets such as Bitcoin, XRP, Litecoin, and Dogecoin. This postponement is likely due to the SEC’s efforts to establish a comprehensive digital asset regulatory framework. Among the delayed products are Truth’s spot Bitcoin and Ethereum ETF, CoinShares’ spot Litecoin ETF, and multiple XRP ETFs from 21Shares, CoinShares, Bitwise, Canary, and Grayscale, along with 21Shares’ staking proposal for its spot Ethereum ETF and Grayscale’s spot Dogecoin ETF application. Except for Truth’s filing, all have final deadlines in October.
Bloomberg ETF analysts Eric Balchunas and James Seyffart indicated in July that the SEC’s delays are part of a strategic move to create approval criteria before allowing any individual crypto ETF to launch. Seyffart suggested that the agency may be stalling these ETFs until a digital asset ETF framework is developed, which would introduce a generic listing standard defining which digital assets qualify for an ETF wrapper and the criteria they must meet. Such a framework would replace the current case-by-case review process requiring each crypto ETF to secure a Commission order prior to listing.
The SEC has reportedly been working with US exchanges since July to establish generic listing standards for token-based ETFs, aiming to remove the need for individual rule-change requests. Under the proposed system, ETF sponsors could skip the traditional Form 19b-4 process if the underlying tokens satisfy specific predetermined criteria. Instead, sponsors would submit registration statements using Form S-1, undergo the standard 75-day review, and list the products after waiting periods end. Considerations under discussion for these criteria include market capitalization, on-exchange trading volume, and daily liquidity.
Seyffart characterized this generic standard approach as “very good news for the crypto ETF space” because it offers “clear rules of the road.” Balchunas echoed this sentiment, calling it “what everyone wants, what makes sense, and what we think will happen.” Consequently, the first approvals of altcoin-related ETFs are now anticipated to occur only from October onwards, signaling a shift towards a more standardized and efficient approval process within the crypto investment space.