SEC Faces Diverging Proposals on Crypto ETF Filing Confidentiality and Review Speed

The U.S. Securities and Exchange Commission (SEC) has released comments on its request for input regarding “Novel ETFs,” a category that includes funds holding crypto assets. The responses reveal a split between industry groups over two key issues: whether ETF registration statements should be kept confidential before they can trade, and how quickly the SEC should complete its review.

Confidential vs. public filing proposals

Grayscale, which currently manages 18 crypto ETFs and ETPs, supports a confidential filing period. The firm argues that secrecy would reduce the incentive for competitors to file duplicate or copycat registrations, a concern heightened by the suspected use of AI to generate near‑identical filings.

The Crypto Council for Innovation (CCI) backs a similar optional confidential or pre‑filing process, citing the same risk of imitative filings that could stifle genuine innovation.

In contrast, Charles Schwab – a traditional broker with about $13 trillion in client assets – opposes fully confidential filings. Schwab says public filings allow it to prepare investors and educate the market before a new product launches. The firm proposes a compromise: if a filing is confidential, it should become public at least 75 days before the fund becomes effective, giving brokers time to ready their clients.

CCI also requests that the SEC extend the 75‑day public‑filing rule to its members, providing a guaranteed timeline for launch planning.

Speed of the SEC review process

Grayscale seeks a shorter review timeline, asking the SEC to respond within 45 days and to keep any confidential process from extending the automatic effectiveness period.

Andreessen Horowitz (a16z) echoes the call for a faster review, noting that filings are now largely templated and that market dynamics move on a shorter horizon than the current review period. a16z stresses that a quicker process should not mean a lighter review.

Both Jane Street and Charles Schwab caution against accelerating the review. They argue that a rushed process could lead to lower‑quality, less liquid products with wider spreads, ultimately harming retail investors.

Potential impact on investors

If the SEC adopts the confidential‑filing and accelerated‑review proposals, the market could see a larger number of crypto ETFs, possibly covering more niche altcoins. However, reduced transparency might leave brokers and investors less prepared for new offerings.

A slower, more public process could limit the number of new products but may improve overall quality and liquidity, potentially resulting in tighter spreads and lower costs for investors.

Current crypto ETF landscape

According to ETF.com, the United States already hosts 174 crypto‑asset‑related ETFs. The largest is BlackRock’s iShares Bitcoin Trust (IBIT), which holds roughly $61 billion in assets, accounting for about 38 % of the total crypto ETF market.