SEC Approves Fast-Track for Crypto Spot ETFs

The SEC’s Wednesday vote represents a dramatic departure from the previous case-by-case review system that required two separate filings—one from the exchange and another from the asset manager—with maximum review periods stretching to 240 days. Under the new framework, the New York Stock Exchange, Nasdaq, and Cboe Global Markets can now implement generic listing standards for Commodity-Based Trust Shares under Rule 14.11(e)(4), effectively eliminating the need for lengthy individual assessments.

The Commission explicitly cited ‘good cause’ to accelerate the approval process, stating in its filing that it found justification to approve the proposals ‘prior to the 30th day after the date of publication of notice.’ This regulatory shift means qualified products meeting specific criteria could begin trading in as little as 75 days, representing a 69% reduction in the maximum approval timeline and potentially unleashing a wave of new crypto investment vehicles.

To qualify under the new streamlined process, crypto spot ETFs must meet one of several rigorous criteria designed to ensure market integrity. The underlying asset must either trade on a market with Intermarket Surveillance Group access, underlie a futures contract listed on a designated market for at least six months with a surveillance-sharing agreement, or already be tracked by an ETF with at least 40% exposure listed on a national exchange.

This development comes as spot ETF applications for major cryptocurrencies including Litecoin, Solana, and Dogecoin await SEC approval. The timing suggests these and other digital assets could benefit from the accelerated process, potentially bringing a diverse range of crypto investment products to mainstream investors through regulated exchanges.

As part of Wednesday’s actions, the SEC also approved the listing and trading of the Grayscale Digital Large Cap Fund, which had previously been available only over-the-counter to accredited investors. The fund’s composition—nearly 80% bitcoin and 11% ethereum, with smaller allocations to solana, cardano, and XRP—demonstrates the type of diversified crypto exposure that may soon become accessible to retail investors through traditional brokerage accounts.

Industry leaders hailed the decision as transformative. SEC Chairman Paul Atkins welcomed the move, emphasizing that it would ‘maximize investor choice and foster innovation by streamlining the listing process and reducing barriers to access digital asset products within America’s trusted capital markets.’ Bitwise Chief Investment Officer Matt Hougan predicted the standards could ‘blow the market wide open,’ while Bitwise President Teddy Fusaro described the approval as ‘a watershed moment in America’s regulatory approach to digital assets, overturning more than a decade of precedent since the first bitcoin ETF filing in 2013.’

However, not all regulators shared this enthusiasm. SEC Commissioner Caroline Crenshaw expressed significant concerns that the fast-tracking process could allow untested products to flood the market without adequate investor protection. ‘The Commission is passing the buck on reviewing these proposals and making the required investor protection findings, in favor of fast tracking these new and arguably unproven products to market,’ she stated, highlighting the ongoing tension between innovation and investor protection that continues to shape crypto regulation.