Regulators Open Gate—Crypto ETF Flood Expected

The U.S. Securities and Exchange Commission (SEC) has approved generic listing standards for commodity-based exchange-traded products (ETPs), a move that is widely seen as accelerating the approval process for spot cryptocurrency exchange-traded funds (ETFs). This decision, announced on September 17, 2025, allows major U.S. exchanges—Nasdaq, Cboe BZX, and the NYSE Arca—to list and trade Commodity-Based Trust Shares that meet specific requirements without undergoing the traditional, time-consuming case-by-case review process under Section 19(b) of the Exchange Act. The approval marks a significant shift in regulatory approach, streamlining the listing process and reducing barriers to market entry for digital asset products.

The new framework, outlined in Rule 6c-11, includes three primary eligibility criteria for spot crypto ETFs. An asset qualifies if it trades on an Intermarket Surveillance Group (ISG) market, underlies a regulated futures contract with at least six months of trading history, or is represented by an existing ETF with at least 40% exposure to the underlying asset. This approach aims to create a rules-based system that reduces regulatory uncertainty while maintaining investor protections. The SEC’s decision also applies to products that are not eligible under these criteria, which will still require case-by-case filings.

One of the immediate implications of the approval is the potential for a rapid increase in new crypto ETF launches. Analysts, including Bloomberg’s Eric Balchunas and James Seyffart, have suggested that the framework could lead to a surge in spot crypto ETFs within the next 12 months, with Solana, XRP, and Litecoin among the first candidates due to their existing regulated futures markets. For instance, Coinbase Derivatives launched regulated Solana futures in February 2025, which have now traded for six months, making Solana eligible under the new rules. This development could lead to the approval of the first Solana spot ETF as early as October 2025.

Alongside the approval of the generic standards, the SEC also cleared the Grayscale Digital Large Cap Fund (GDLC), which aims to be the first multi-crypto ETF in the U.S. The fund is designed to track the CoinDesk 5 Index, which includes Bitcoin, Ethereum, XRP, Solana, and Cardano. Additionally, the SEC approved the listing of options on the Cboe Bitcoin U.S. ETF Index and its mini counterpart, further expanding the range of crypto-linked investment products available to U.S. investors.

While the approval has been broadly welcomed by industry stakeholders and some SEC commissioners, such as Hester Peirce, others have raised concerns about the potential risks. Commissioner Caroline Crenshaw expressed reservations, warning that the streamlined process might lead to the proliferation of untested products without adequate regulatory oversight. She argued that the new framework risks "passing the buck" on investor protections, emphasizing the importance of ensuring that products meet necessary safeguards before entering the market.

Industry experts and ETF providers are already responding to the regulatory shift. Seven major asset managers—Grayscale, VanEck, Bitwise, Canary, Franklin Templeton, Fidelity, and CoinShares—submitted amended S-1 registration statements for their proposed Solana ETFs. These amendments reflect ongoing efforts to refine prospectus language and align with the new framework. The industry anticipates that the SEC’s decision will not only facilitate the approval of existing applications but also encourage the development of new products, including those incorporating features like liquid staking.

The SEC’s decision represents a pivotal moment in the evolution of the U.S. capital markets and the integration of digital assets into mainstream financial products. By reducing regulatory friction and providing a clear pathway for new ETPs, the agency is positioning the U.S. as a global hub for innovation in digital finance. While the debate over investor protections and regulatory oversight continues, the approval of generic listing standards is expected to drive a wave of new investment opportunities, transforming the landscape of digital asset investing.