Leading institutional players in the crypto industry, including Grayscale, 21Shares, and Andreessen Horowitz (a16z), have sent a series of demands to the U.S. Securities and Exchange Commission (SEC) for a radical acceleration of the approval process for exchange-traded investment products (ETFs). At the center of attention is the registration process that issuers consider outdated, which stifles innovation and creates unequal conditions for market participants.
Grayscale's key initiative involves introducing a mechanism for confidential submission of initial draft documents. This practice, long used in traditional finance, would protect innovative fund structures from premature copying by competitors. Additionally, the company insists on introducing strict regulations: SEC staff must provide responses to issuer requests no later than 45 days. 21Shares made similar proposals, noting that the current system, driven by AI, leads to a multitude of similar applications that carry no real novelty.
a16z also advocated for shorter timelines, citing the template-based nature of information disclosure and electronic document management. However, the venture giant made an important caveat: acceleration should not weaken the thoroughness of regulatory review.
Division in the Industry
Not all market participants share the optimism about the race for speed. Market maker Jane Street warns against haste, which could lead to the registration of products with insufficiently developed liquidity structures. The company insists on the mandatory participation of at least two authorized participants (APs) to ensure market stability. In turn, Charles Schwab opposed full confidentiality, proposing a compromise: publication of documents at least 75 days before the application takes effect, if non-public discussions with the sponsor do take place.
A Look at the Future of Crypto-ETPs
In parallel with procedural issues, discussion participants raised substantive topics. Multicoin Capital, together with Jito Labs and the Solana Policy Institute, put forward a revolutionary proposal to allow the use of liquid staking tokens in spot crypto-ETPs. According to analysts, this would allow these assets to make up virtually the entire product portfolio, opening a new era of returns for institutional investors.
Exchange operator NYSE drew attention to another systemic problem—the unpredictability of listing timelines. The platform points to cases where SEC staff request delays in launches without clear timeframes, while competitors continue similar processes.
Comments were accepted until August 31, but the regulator continues to publish materials even after this date, which only increases uncertainty. It is worth recalling that in August, the SEC already presented an ambitious Regulation Crypto Assets project, simplifying capital raising through tokens.
My analysis: The pressure from Grayscale and other institutional players is a signal that the market is ripe for a new generation of products, but the SEC's bureaucratic machine is not keeping pace with the rate of innovation. Introducing confidential document submission is a logical step that has long been overdue. However, the compromise proposed by Charles Schwab looks more balanced: it protects market interests from information asymmetry while preserving a competitive advantage for pioneers. The industry needs not just an accelerated process, but predictable and clear rules of the game that will allow it to plan development years ahead.