SEC Approves New Standards to Speed Up Crypto ETP Listings

The SEC’s approval, issued on September 17, grants accelerated approval of proposed rule changes filed by Nasdaq, Cboe, and NYSE, effectively creating a more streamlined pathway for commodity-based trust shares—including those tied to digital assets. This decision culminates years of regulatory back-and-forth between the SEC and exchanges over how to handle crypto-based products, which have historically faced lengthy and uncertain review processes. By adopting these generic listing standards, the regulator aims to significantly shorten the time it takes to bring new ETPs to market, potentially opening the door for broader crypto investment products that meet specific criteria.

This move comes at a critical juncture, as the SEC has been delaying decisions on several altcoin ETFs, most of which are set to reach their final deadlines in October. The timing suggests a strategic effort by the regulator to address mounting pressure from the industry and investors seeking clearer, more efficient routes for crypto ETP listings. However, as Fox Business reporter Eleanor Terret noted, the new standards do not represent a blanket approval for all crypto ETPs, as threshold requirements remain firmly in place to ensure only qualifying products benefit from the expedited process.

Despite the positive sentiment surrounding the SEC’s decision, industry experts are quick to caution that the so-called ‘floodgates’ for crypto ETPs are not yet fully open. Tushar Jain of Multicoin Capital emphasized that the generic listing standards do not apply to every type of crypto ETP, and threshold requirements will prevent many products from immediately qualifying. These thresholds, though unspecified in the announcement, are likely designed to filter out higher-risk or less transparent digital asset products, ensuring that only those meeting rigorous standards can leverage the new expedited approval process.

The SEC itself signaled that it may revisit and refine these standards as the digital asset market evolves, indicating a cautious, iterative approach rather than a wholesale liberalization of crypto ETP listings. This nuanced stance reflects the regulator’s ongoing balancing act between fostering innovation and protecting investors, a challenge that has defined its relationship with the crypto industry for years. For issuers, the new standards provide much-needed clarity and reduced delays, but they must still navigate specific compliance hurdles to gain approval.

The approval of generic listing standards is poised to have a meaningful impact on the landscape of crypto investment products, particularly as the SEC faces impending deadlines for altcoin ETF applications. By creating a more predictable and efficient approval framework, the regulator is likely to encourage more issuers to develop and submit proposals for crypto ETPs, potentially expanding the range of available products for investors. However, the persistence of threshold requirements means that the expansion will be gradual and selective, rather than sudden and comprehensive.

Looking ahead, the evolution of these standards will be closely watched by market participants, including exchanges like Nasdaq, Cboe, and NYSE, as well as firms like Multicoin Capital. Future SEC actions will determine how broadly the standards can be applied across different digital asset products, and whether further iterations will lower barriers for emerging crypto ETPs. For now, the move represents a significant step forward in regulatory clarity and efficiency, offering a glimpse into a future where crypto ETPs are more seamlessly integrated into traditional financial markets—provided they meet the SEC’s stringent criteria.