SEC considers allowing crypto ETFs to launch without 19b-4 filing

Regulators explore streamlined rules that could speed up approval for token-based investment funds awaiting entry to the US market.

Key Takeaways

• The SEC is considering permitting crypto ETFs to launch without requiring a 19b-4 filing.
• Generic listing standards may streamline the approval process for token-based ETFs.

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Early-stage talks are underway between the US SEC and exchanges to establish a generic listing protocol for crypto exchange-traded funds, journalist Eleanor Terrett reported Tuesday, citing a spokesperson for the securities agency.

Under the potential framework, a crypto ETF that meets certain pre-established criteria could skip the traditional 19b-4 rule-change filing process. Instead, issuers would be able to file a standard S-1 registration statement, wait the requisite 75-day review period, and launch the fund directly on the exchange, assuming the token meets the new listing standard.

Such a system would represent a major shift in how the SEC handles crypto-related ETFs. Currently, crypto ETFs face a two-step approval process that requires both an S-1 registration and a 19b-4 filing from the listing exchange.

Each step can involve prolonged back-and-forth between issuers, exchanges, and the SEC, often delaying or derailing product launches.

While the details are still being discussed, the criteria for qualifying tokens are speculated to include market-based metrics, such as market capitalization, daily trading volume, and liquidity across regulated markets.

The possible shift in the regulatory framework comes as multiple asset managers await decisions on their crypto ETF applications from the SEC.

This is a developing story. Please come back for further updates.

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