U.S. SEC seeks comment on novel ETF rules as crypto fund market expands

U.S. SEC seeks comment on novel ETF rules as crypto fund market expands
SEC eyes crypto ETF rules

After a wave of approvals broadened cryptocurrency exchange-traded funds beyond bitcoin and ethereum, the U.S. Securities and Exchange Commission is reassessing how newer ETF structures should be regulated. The review also covers proposed funds tied to prediction markets, an area the regulator has not yet approved and has recently delayed in several cases.

Highlights

  • The SEC has opened a 60-day public comment period on the regulation of 'novel ETFs,' including crypto and prediction-linked funds.
  • Since Paul Atkins became SEC Chair in April 2025, the agency has approved dozens of crypto ETFs, expanding trading beyond just bitcoin and ethereum to include SOL and DOGE.
  • The SEC has delayed approval of prediction market ETFs, but Chair Atkins indicated the agency will review such proposals with transparency and care.

Consultation covers crypto and prediction-linked funds

The SEC said on Tuesday that it is seeking public comment on the regulation of "novel ETFs" and on whether its current process for registering those products needs to change, as first reported by The Block.

In a statement, SEC Chair Paul Atkins said the request for comment is intended to gather input on how the U.S. ETF market can keep growing and innovating while serving investors effectively. The agency is asking whether a standardized framework for listing ETFs that meet certain criteria should extend to these newer funds and whether some may need to register as an investment company.

Comments are due within 60 days.

Market growth puts pressure on current framework

Since Atkins took over the SEC in April 2025, the regulator has approved dozens of crypto ETFs beyond the earlier bitcoin and ethereum products cleared under former Chair Gary Gensler. Funds tracking assets from SOL to DOGE are now trading, widening the range of digital-asset exposure available through listed vehicles.

Regulatory attention is also shifting toward prediction market ETFs tied to political and economic outcomes. The SEC has not approved those products so far and has delayed several proposals, though Atkins said last month that the agency plans to consider them in a transparent and thoughtful manner.

Our earlier article covered Schwab Asset Management’s decision to close and liquidate the Schwab Ariel Opportunities ETF, a move aimed at streamlining its fund lineup. We noted that such ETF closures can trigger short-term redemptions and reallocations, influencing trading activity and investor flows around Charles Schwab (SCHW) alongside mixed technical signals in the stock.

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