Crypto firms ask SEC to keep existing rules for novel ETFs

Crypto‑industry participants have written to the U.S. Securities and Exchange Commission (SEC) requesting that the agency avoid a sweeping ban on “novel” exchange‑traded funds (ETFs). The letters, submitted on August 31, argue for case‑by‑case assessment based on each product’s risk profile.

Key industry positions

a16z – The venture‑capital firm asked the SEC to evaluate novel products according to their underlying characteristics, to coordinate fund‑registration and exchange‑listing reviews, and to adopt more predictable timelines.

Grayscale – The digital‑asset manager supported an optional confidential pre‑filing process and opposed changes to investment‑company classifications that would automatically bring non‑security holdings under the Investment Company Act framework.

Crypto Council for Innovation (CCI) – The trade group called for clearer registration‑status disclosures and for regulatory efficiencies that treat ETFs and non‑ETF exchange‑traded products consistently, while preserving existing investor protections.

Points of disagreement

• a16z proposes that the term “ETF” be reserved for funds governed by the Investment Company Act of 1940.
• Grayscale contends that “ETF” should describe economic characteristics regardless of the legal wrapper.

Regulatory context

The SEC opened a 60‑day public‑comment period on June 30 to assess whether current regulations adequately cover the next generation of ETFs, how such funds should be regulated, and whether registration processes need updating. The industry letters were posted by the SEC near the end of this comment window.

Industry rationale

All three commenters note that crypto‑based exchange‑traded products now benefit from more mature market infrastructure, including exchange‑approved listing standards and established disclosure requirements. They argue that these products should not be grouped with funds holding private assets or employing other novel strategies.