The U.S. Securities and Exchange Commission (SEC) is brewing a major transformation that could completely change the listing approval process for cryptocurrency exchange-traded funds (ETFs).
According to independent journalist Eleanor Terrett, the SEC is in the early stages of developing a set of universal listing standards for crypto ETFs, aimed at significantly accelerating the approval speed of such funds. If implemented, this move suggests that after Bitcoin and Ethereum spot ETFs, more mainstream digital assets' ETF products will be poised for a "floodgate opening".
Fast Track: From 240 Days to 75 Days
Currently, crypto ETF listings follow a complex and time-consuming process: exchanges must submit a 19b-4 form, which typically triggers a review period lasting 240 days. However, according to The Block's sources, the new framework the SEC is discussing would significantly shorten this approval time, potentially streamlining the process to just 75 days.
Sources say this initiative is primarily driven by major exchanges, aiming to align crypto ETF approvals with traditional ETF processes.
"This is essentially an initiative from the exchanges to the SEC, stating: 'We want you to approve these listing standards we're proposing,'" a source revealed. "This way, every time we have a new crypto ETP (exchange-traded product), as long as it meets these standards, we won't need to seek SEC approval each time. We can approve it ourselves."
New Standards Considerations: Market Cap, Decentralization, and Token Distribution
The universal listing standards under discussion may cover a range of key metrics, including: total market capitalization of digital assets, degree of decentralization, and wallet distribution. The SEC has also been involved in these discussions to ensure that any ultimately approved standards effectively protect investors and promote market efficiency.
Additionally, according to new guidelines released on July 1, issuers must detail in their disclosures: custody arrangements, risk factors, and operational challenges in the cryptocurrency market. The SEC emphasized that comprehensive risk disclosure must cover price volatility, cybersecurity threats, network attacks, fraud risks, and competition from other products.
An SEC insider stated: "They (SEC) are actively communicating with exchanges... they just want to ensure that any approved standards protect investors and create an efficient market."
Despite the anticipation, ETF issuer 21Shares noted they haven't directly discussed the "proposed tokenized ETF universal listing standards" with the SEC. However, 21Shares has submitted ETF proposals tracking Solana (SOL) and XRP.
21Shares stated: "If such a framework is implemented, it would significantly reduce the complexity and uncertainty of the current listing process, eliminating many of the guesswork and ambiguities inherent in the existing 19b-4 approval procedure."
Moreover, Trump Media Tech Group (operator of Truth Social) has submitted a filing to the SEC proposing a "Crypto Blue Chip ETF" that plans to primarily invest in Bitcoin (70%), Ethereum (15%), Solana (8%), XRP (5%), and CRO (2%).
This move not only marks the direct entry of a large listed company but also reflects the underlying political dynamics, with Trump pushing for a more crypto-friendly regulatory environment.
Analyst Predictions: Flood Expected as Early as September
Bloomberg ETF analyst James Seyffart stated in a WOLF Trading X Spaces on Tuesday that he expects the framework's draft to potentially be released this month and implemented as early as September or October. Seyffart confidently said: "We'll see a 'flood' of these other assets entering the market, which is exactly what I'm anticipating."
He and Bloomberg senior ETF analyst Eric Balchunas recently predicted a 95% probability of SEC approval for SOL, XRP, and Litecoin ETFs. Meanwhile, Dogecoin, Cardano, and Polkadot and other Altcoin ETF proposals have a high approval likelihood of around 90%.
This means that once the new listing standards framework takes effect, the cryptocurrency ETF market landscape will rapidly expand, covering more mainstream Altcoins beyond Bitcoin and Ethereum, providing investors with a broader digital asset investment channel.
Although issuers like 21Shares say they haven't directly participated in universal listing standard discussions, it is generally believed that once the new framework is implemented, it will greatly reduce the complexity and uncertainty of crypto ETF listings. With regulatory clarity and continuous emergence of new products, 2025 is expected to be the "breakout year" when crypto ETFs truly go mainstream.
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