Crypto Industry Urges SEC to Avoid Broad ETF Restrictions

Prominent crypto industry players have urged the US Securities and Exchange Commission (SEC) to avoid treating “novel” exchange-traded products (ETFs) as a single, one-size-fits-all regulatory category. Instead, they say the SEC should assess each proposal based on its specific risk profile and product mechanics, with more predictable review timelines and streamlined coordination between fund registration and exchange listing.

The comments—submitted in filings posted by the SEC during the tail end of a 60-day public comment period—were dated Aug. 31. Venture capital firm a16z, digital asset investment manager Grayscale, and the Crypto Council for Innovation (CCI) argued for maintaining existing investment-company classification guardrails and avoiding sweeping rule changes that could automatically pull non-securities holdings into the Investment Company Act framework.

Key takeaways

• a16z, Grayscale, and CCI urged the SEC to evaluate “novel” ETFs by their underlying characteristics rather than applying blanket restrictions.
• The trio opposed changes to investment-company classifications that could inadvertently subject products holding non-securities to the Investment Company Act.
• They asked for more predictable and coordinated review processes linking fund-registration steps with exchange-listing approvals.
• There was disagreement on how the term “ETF” should be used—legal wrapper versus economic characteristics.
• Several commenters supported optional confidential pre-filing processes to clarify expectations earlier.