Crypto Industry Urges SEC to Avoid Categorical Restrictions on Novel ETFs

The US Securities and Exchange Commission (SEC) is weighing how to regulate the next wave of “novel” exchange-traded products, and major crypto investors are pushing back on a one-size-fits-all approach. In public comments posted in late August, venture capital firm a16z, digital asset investment manager Grayscale, and the Crypto Council for Innovation (CCI) urged the regulator to preserve existing classifications and review products based on their specific risk profiles rather than sweeping new products into a separate regulatory bucket.

The submissions were filed around the close of the SEC’s 60-day public comment window following the agency’s June 30 request for feedback on whether current rules adequately cover novel ETFs and whether the approval and registration process should be changed. The commenters broadly agreed that the SEC should avoid blanket restrictions that could inadvertently force additional Investment Company Act requirements on funds that hold assets the SEC would otherwise treat differently.

Key takeaways

• Crypto firms want product-by-product risk review rather than categorical limits on “novel” ETF structures.
• a16z, Grayscale, and CCI oppose sweeping changes to investment-company classifications that could automatically pull some non-securities holdings into the Investment Company Act framework.
• All three supported more predictable review paths, including coordination between fund-registration and exchange-listing processes.
• The commenters diverged on ETF terminology—a16z ties the label to the Investment Company Act wrapper, while Grayscale focuses on the product’s economic characteristics.
• CCI asked for clearer disclosures rather than radical changes to the approval approach.