Bitcoin News Today: Cboe and NYSE Arca Push SEC for Faster Crypto ETF Listings via Rule Change

Two major U.S. exchanges—Cboe BZX and NYSE Arca—have submitted a joint proposal to the Securities and Exchange Commission (SEC) requesting a rule change that would allow certain crypto ETFs to be automatically listed without undergoing the SEC’s case-by-case review process under Rule 19b-4 [1]. If approved, the change could significantly reduce the time and complexity required to bring new crypto ETFs to market, particularly for funds tracking assets like Solana or XRP [1]. The proposal seeks to align the treatment of crypto ETFs with existing rules for traditional commodity ETFs, such as gold funds, by applying a standardized approval framework to qualifying products [1].

The current approval process for crypto ETFs is often lengthy and resource-intensive due to the SEC’s requirement for detailed rule filings for each product. Cboe and NYSE Arca argue that their proposed rule change would remove unnecessary regulatory friction and bring crypto ETFs in line with how equity and bond ETFs are handled today [1]. This approach could streamline market entry for new products while maintaining investor protections, provided the funds meet a set of predefined conditions [1].

However, the proposal has sparked debate over its broader implications. Andrew Rossow, a public affairs attorney and CEO of AR Media Consulting, warned that the rule could unintentionally create “regulatory favoritism” by disproportionately benefiting Bitcoin and Ethereum-based products over other digital assets [1]. He emphasized that such a selective approach risks undermining innovation in the broader crypto ecosystem and could “stifle the genuine impact and potential of other crypto projects” [1]. Rossow also highlighted the growing role of ETF issuers in facilitating the acquisition and disposition of crypto assets, noting the need for stronger operating procedures and investor protection mechanisms [1].

The SEC now has up to 240 days to review, approve, deny, or request modifications to the proposal. In the past, the agency has taken the full 240-day period for similar filings, meaning a decision could take several months [1]. If the rule is adopted, it could accelerate the development of a more liquid and diversified crypto ETF market, potentially paving the way for a new wave of products tracking alternative cryptocurrencies.

The broader regulatory environment for crypto ETFs is also shifting. Recently, the SEC approved in-kind creation and redemption mechanisms for spot Bitcoin and Ethereum exchange-traded products (ETPs), a structural change that is expected to enhance market efficiency and reduce tracking errors [7]. This development aligns crypto ETPs with traditional commodity ETFs by allowing authorized participants to exchange the underlying crypto assets directly, rather than relying on cash-based transactions [7]. Analysts suggest this could lead to tighter bid-ask spreads, lower transaction costs, and improved liquidity, all of which are critical for institutional adoption [7].

Market participants are also watching key metrics such as ETF premiums and discounts relative to net asset value (NAV), the spread between futures and spot prices, and overall liquidity across major trading venues. If these indicators stabilize and improve, it could further validate the long-term viability of in-kind ETPs and encourage sustained investor inflows [7].

Sources:

[1] title: US Exchanges Ask SEC to Consider Rule Change to Speed Up Crypto ETFs

url: https://decrypt.co/332846/us-exchanges-ask-sec-to-consider-rule-change-to-speed-up-crypto-etfs

[7] title: SEC's in-kind approval can spark HUGE $710 billion supply squeeze for Bitcoin ETFs

url: https://cryptoslate.com/secs-in-kind-approval-can-spark-huge-710-billion-supply-squeeze-for-bitcoin-etfs