The Securities and Exchange Commission (SEC) continues to navigate the complex landscape of cryptocurrency investments, recently postponing decisions on several prominent exchange-traded fund (ETF) applications. These delays, however, are not merely deferrals but are part of a broader strategic initiative by the SEC to establish a standardized framework for the approval of token-based ETFs, potentially paving the way for a more streamlined future.
SEC Delays and October Outlook
The latest postponements affect significant proposals, including BlackRock's Ethereum staking ETF and Franklin Templeton's applications for spot XRP and Solana ETFs. These decisions were announced on September 10, positioning the applications for a potential batch approval window anticipated in October. This timeline aligns with predictions from industry analysts, who foresee a wave of crypto ETF approvals as many of the over 90 pending filings reach their final deadlines.
Streamlining Approvals with a Generic Framework
At the heart of these ongoing delays is the SEC's active development of a generic listing framework designed to standardize the approval process for crypto ETFs. This initiative aims to eliminate the need for individual rule-change requests for qualifying assets, allowing ETF sponsors to bypass the customary Form 19b-4 process. Under the proposed framework, sponsors would submit standard registration statements (Form S-1) and, after a 75-day review period, could list their products once waiting periods conclude. Key qualification metrics under consideration include market capitalization, on-exchange trading volume, and daily liquidity, which would significantly shorten approval timelines and reduce iterative comment cycles between the agency and applicants.
Catalyzing Future Approvals
The establishment of this standardized framework, alongside potential early successes, could ignite broader approval momentum for the multitude of pending crypto ETF applications. For instance, the anticipated launch of a Dogecoin ETF, structured under the 40 Act, is seen as a potential catalyst. Should this "memecoin ETF" successfully debut, it could signal a shift, encouraging more widespread acceptance and approval for a diverse range of crypto ETFs, including those tied to Solana, XRP, Litecoin, and staking versions of existing products, from major issuers like VanEck, Grayscale, and Bitwise.
