What does ETF approval shortcuts mean for cryptography?

The U.S. Securities and Exchange Commission approved new listing standards for commodity-based trust shares last week. This is a policy shift that could shorten the path to launching funds (ETFs) traded on spot crypto exchanges, but issues remain for some investors.

Bloomberg ETF analyst James Sefert said the policy changes announced by the SEC on September 17th would be a positive move towards a “wave of the launch of the Spot Crypto ETP.”

Eric Balknath, another senior ETF analyst at Bloomberg, suggests that the SEC has just cleared the Crypto ETF’s regulatory tape “as long as Coinbase has futures,” suggesting the various regulations faced by the applicant depending on the investable vehicle they plan to offer.

sauce: Jake Cherbinski

“For new futures or spot ETFs in the already ‘legalized’ category (BTC, ETH), these recent changes to rules have little or none until approval.

“However, for futures or spot ETFs of digital assets that have not yet been individually examined, changes to these rules could reduce the time between year and months to approval. Of course, ETFs still need to adhere to existing standards of ETF formation, listing and trading.”

Federico Brokate, US Business Head of ETF Issuer 21Shares, said the listing standard, “Inscope Assets,” will significantly reduce approval times as they “have a lot more predictable for issuers and investors.”

“We no longer have both the S-1 and 19B-4 (application) needed for an in-scope or eligible assets,” Brokate said. “Now, if the product meets general standards such as existing futures or qualifications via comparable structures, the exchange can list it directly.”

Are there any risks to ETF issuers or retail investors?

The SEC has reduced enforcement action against cryptocurrency companies and adopted policies that generally support the industry.

Caroline Crenshaw, the SEC’s sole Democratic Secretary, said policy changes have circumvented requirements for considering investor protection after the listing standards announced. She added that the cryptographic ETF, which is likely to arise from the policy, is “a new and undoubtedly unproven product.”

“After all, our mission is to protect investors, not to quickly track untested investment products for listings and trading on exchanges,” Crenshaw said.

Kim of Santa Clara University argued that “all existing diligence requirements are still in place,” adding that changes to the rules can be “considered as clarification.” He said:

The longstanding broad requirements from the ’33 and ’40 acts are still in place and have not been reduced by the SEC’s recent decision. ”

Greg Benhaim, vice president of products at Digital Asset Manager 3IQ, said in a statement shared with CointeLegraph that general listing standards help the average investor distinguish between the coins they buy.

“For example, Avax ETFs and ADA ETFs are very different, but investors may not fully appreciate this,” says Benhaim. “In the long term, this will open up a way for the industry to identify which assets have significant retail appeal in the form of ETFs.”

https://www.youtube.com/watch?v=2Sonoeg6wc8

Since the change in listing standards, Asset Manager Hashdex has expanded its Crypto ETF to include XRP (XRP), Solana (SOL) and Stellar (XLM). However, Balchunas and others speculate that they are referring to more coins, referring to 22 coins on Coinbase “qualifying for Spot ETF AIDS.”