SEC Considers Streamlined Crypto ETF Listing Process

The Securities and Exchange Commission (SEC) is reportedly in early discussions with major exchanges to establish a standardized listing process for crypto ETFs. This potential overhaul could significantly streamline the approval process, allowing issuers to file an S-1 registration and wait for 75 days, rather than navigating the complex 19b-4 approval process. This shift is seen as a response to the growing pressure from asset managers, lawmakers, and courts, which have criticized the SEC's inconsistent treatment of crypto products.

The current dual-filing system, requiring both an S-1 registration and a 19b-4 exchange rule change, has been widely criticized for adding months of unnecessary delays. The SEC's apparent willingness to consider a standardized path for token ETF listings marks a rare concession to operational reality, following years of mounting pressure and the landmark legal victory of the Grayscale Bitcoin Trust. This victory forced the SEC to reconsider its spot Bitcoin ETF denials, exposing the regulatory arbitrage at play.

With Bitcoin and Ethereum ETFs already trading, the agency appears to be preemptively structuring a clearer path for the next wave of funds. The proposed single-track system suggests that the SEC is acknowledging the reality that crypto ETFs are here to stay and that manual vetting of every filing is unsustainable. By offloading initial eligibility checks to exchanges, regulators could focus on systemic risks rather than paperwork, mirroring the SEC’s 2020 “ETF Rule” modernization, which simplified traditional ETF launches.

However, the success of this new system hinges on the undisclosed listing criteria, which are expected to focus on hard metrics like market cap, trading volume, and liquidity thresholds. These requirements could make or break many proposed crypto ETFs before they even reach the starting line. The SEC has declined to comment on the specifics of these criteria, leaving industry observers to speculate on what exactly will qualify a token for this fast-track process.

If implemented, the changes could trigger a gold rush among mid-tier asset managers previously deterred by the cost and complexity of the 19b-4 process. The move comes as crypto ETFs have evolved from niche products to mainstream contenders, with global assets under management surpassing $90 billion this year. The SEC's case-by-case approvals, often mired in repetitive disclosures and last-minute revisions, have struggled to keep pace with this growth.

The proposed single-track system could fundamentally change how these funds reach the market, setting the stage for an unprecedented wave of listings. However, the devil lies in the details of the listing criteria, which remain undisclosed. The SEC's willingness to consider this change marks a significant shift in its approach to crypto ETFs, acknowledging the need for a more efficient and sustainable regulatory framework.