SEC Makes Spot Crypto ETF Listing Process Easier, Approves Grayscale's Large-Cap Crypto Fund

The U.S. Securities and Exchange Commission (SEC) on Wednesday approved a set of rules for exchanges to list exchange-traded products (ETPs) holding spot commodities, including cryptocurrencies, without requiring the agency’s individual review each time.

The decision will enable exchanges to proceed with the listing of proposed ETFs by sidestepping the often-lengthy 19(b) rule filing process that can take up to 240 days and requires the SEC to actively approve or disapprove an ETF.

Essentially, the process will be more streamlined than before.

ETF Issuers will approach exchanges (Nasdaq, NYSE, CBOE) with a product idea and desire to list their ETF. If the proposed strategy (token or combination of tokens) of the issuers meets the generic listing standard, then the exchange can proceed with listing the ETF.

SEC Chairman Paul Atkins said the decision was aimed at reducing barriers to accessing digital asset products in regulated U.S. marketplaces.

"By approving these generic listing standards, we are ensuring that our capital markets remain the best place in the world to engage in the cutting-edge innovation of digital assets," SEC Chairman Paul Atkins said in a statement.

Alongside the rule change, the agency signed off on the Grayscale Digital Large Cap Fund, which tracks the assets in the CoinDesk 5 Index and currently consists of bitcoin BTC$89,717.33, ether ETH$3,052.29, XRP$2.0355, Solana SOL$132.80 and ADA$0.4179.

Read more: SEC's Pause of Grayscale Fund Is Likely Temporary

The regulator also approved the launch of options tied to the Cboe Bitcoin U.S. ETF Index and its mini version, broadening the set of crypto-linked derivatives available on regulated U.S. markets.

Big move for altcoin ETFs

The SEC's listing standards could potentially open the way for a wave of spot-based altcoin ETFs that have been waiting for regulators' nod to enter the market.

"This is the crypto ETP framework we've been waiting for," James Seyffart, ETF research analyst at Bloomberg Intelligence, said in an X post. "Get ready for a wave of spot crypto ETP launches in coming weeks and months."

Echoing this sentiment, Kristin Smith, the President of Solana Policy Institute, said, "We are incredibly encouraged by tonight's news: the SEC continues to promote the rule of law by setting clear rules of the road for US businesses and to take positive steps to allow American investors to safely access digital assets."

"These new generic listing standards are a net-positive for U.S. investors, markets, and digital asset innovation. Excited for the next wave of crypto adoption!," she added.

UPDATE (Sept. 8, 12:05 UTC): Corrects 270 days to 240 days and clarifies the process of approval.