Crypto Firms Weigh In on Proposed New ETF Regulations

Regulatory uncertainty continues to cloud the US cryptocurrency industry as multiple companies submit their opinions on the proposed new ETF regulations. Grayscale and 21Shares, a Swiss-based cryptocurrency ETF management company, have both requested private filing procedures, citing concerns over rapid imitation of publicly disclosed filings by competing companies.

Grayscale also proposed the introduction of a voluntary procedure that allows for the submission of draft filings privately before listing. They argued that this could suppress the motivation for submitting imitative and duplicative applications, and requested a commitment from SEC staff to respond within 45 days.

The Crypto Council for Innovation (CCI) submitted an opinion requesting the avoidance of a uniform expansion of the definition of investment companies and consideration of private filing procedures. Major market maker Jane Street pointed out that pressure to expedite the early listing of ETFs could lead to hasty filings, potentially compressing the time available for market makers to gather opinions on fund design and liquidity.

The SEC has continued to accept submitted documents even after the August 31 deadline for public comments, and has not yet indicated when it will respond. The New York Stock Exchange (NYSE) called for more predictable operations, noting that there are cases where SEC staff request listing delays without providing clear deadlines during the listing examination of new ETFs.