Crypto Firms Push Back Against SEC's 'Novel ETF' Review Process

The US Securities and Exchange Commission (SEC) is facing pressure from Grayscale Investments and Andreessen Horowitz to streamline the review process for new cryptocurrency exchange-traded products. The two companies, along with the Crypto Council for Innovation, argue that each product should be reviewed on a case-by-case basis rather than being treated as part of a single category.

The SEC had requested comments in June on 'novel ETFs', which include funds tied to crypto, commodities, private assets, and other unique features. The comment period closed on August 31, but the SEC has yet to announce its next step. Grayscale, a16z, and the Crypto Council argued that treating each product as one category would slow down the process for products with existing compliance records.

Charles Schwab and Jane Street took a different stance, emphasizing the need for public transparency and robust market structure checks. Schwab rejected the idea of fully confidential reviews, while Jane Street highlighted the importance of having at least two authorized participants to prevent trading distortions in times of stress.