Crypto Sector Urges SEC to Reassess Novel ETF Approvals

Key players in the crypto sector have urged the US Securities and Exchange Commission (SEC) to reassess its approach to novel exchange-traded funds (ETFs). In a joint letter, venture capital firm Andreessen Horowitz (a16z), digital asset manager Grayscale, and the Crypto Council for Innovation called on the SEC to evaluate each proposed product individually rather than imposing blanket restrictions. They argue that this approach will better align regulation with industry innovation and investor interests.

The SEC had opened a 60-day comment period in June, during which it sought public input on whether current regulations are sufficient for the next generation of ETFs, including those linked to digital assets. The stakeholders expressed opposition to sweeping regulatory changes that could delay product rollouts or impose additional requirements without regard to each fund's specific characteristics.

a16z emphasized the need for the ETF designation to be limited to funds governed by the Investment Company Act of 1940. Grayscale, however, argued for a more functional definition of ETFs, regardless of regulatory structure. The ongoing dialogue reflects growing industry interest in launching more diverse digital-asset investment products as both regulatory scrutiny and investor demand increase.