SEC establishes rules for crypto ETF applications
The U.S. Securities and Exchange Commission (SEC) is advancing toward a more structured approach for regulating crypto exchange-traded products (ETPs).
On July 1, the SEC’s Division of Corporation Finance issued detailed guidance on what crypto ETF issuers should include in their registration filings under the Securities Act and the Exchange Act, reports Crypto News.
While the guidance does not introduce new laws, it sets clearer expectations on critical areas like net asset value (NAV) calculation, custody standards, benchmark selection, service provider relationships, and comprehensive risk disclosures. The SEC emphasized that issuers must now provide transparent information about crypto custody practices, specifying whether assets are stored in hot or cold wallets, who controls the private keys, and the extent of insurance coverage. This push for detailed disclosures aims to streamline the approval process and ensure more consistent applications, minimizing delays caused by incomplete or vague filings.
Transparency and accountability under the spotlight
In addition to tightening custody standards, the SEC is demanding issuers offer greater transparency about their service providers and any potential conflicts of interest. For example, the agency expects issuers to disclose if the ETF sponsor or its affiliates hold the underlying crypto assets. This enhanced scrutiny is based on the SEC’s review of recent spot crypto ETF filings, which highlighted common gaps in risk reporting and operational clarity.
By standardizing disclosure practices, the commission seeks to improve investor protections and foster a level playing field. The regulator’s new guidelines reflect its intent to bring the crypto ETF registration process more in line with traditional financial products, while still accounting for the unique risks posed by digital assets.
Potential creation of a formal crypto ETF rulebook
Beyond the newly issued guidelines, the SEC may be laying the groundwork for an official listing framework for spot crypto ETFs. According to journalist Eleanor Terrett, the commission is reportedly exploring the creation of a formalized listing standard that could streamline the application process. Under the potential framework, crypto ETFs that meet key thresholds — such as market capitalization, liquidity, and trading volume — might bypass the current 19b-4 rule change process.
Instead, they would be able to file a standard S-1 registration and list within 75 days, dramatically shortening the approval timeline. While this development is still in early discussions, it signals the SEC’s recognition of the growing demand for crypto ETFs and its willingness to introduce a more predictable path to market for issuers. This could mark a significant step toward mainstream acceptance and regulatory clarity for crypto investment products in the U.S.
Recently we wrote that crypto industry lobbyists failed to push through any provisions in the 1,000-page budget bill passed by the U.S. Senate on July 1—hailed by President Trump as the “Big Beautiful Bill.”
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