SEC Hits Pause on Crypto ETF Approvals—Streamlined Process in the Works

The SEC just kicked the can down the road—again—on multiple crypto ETF applications. But here’s the twist: they’re quietly building a faster approval pipeline. Wall Street’s favorite 'wait-and-see' strategy strikes once more.

Behind the delays? A bureaucratic shuffle to standardize the chaotic crypto ETF review process. Because nothing says 'efficient markets' like regulators playing catch-up with a trillion-dollar asset class.

Meanwhile, traders are left guessing which coin will get the golden ticket next. Spoiler: it won’t be the one you’re holding.

Framework strategy is a priority

Bloomberg ETF analysts Eric Balchunas and James Seyffart suggested in July that the delaysto establish approval criteria before greenlighting individual applications. 

Seyffart stated that this “might be the SEC’s way of stalling these things from becoming ETFs before they develop a digital assets ETF framework.”

He added that the framework WOULD create “some sort of generic listing standard for what digital assets are allowed in an ETF wrapper and what criteria they’ll use.” 

The approach mentioned aims to replace the current case-by-case review process, which requires each crypto ETF to secure a Commission order before listing.

The SEC has been reportedly collaborating with US exchanges since July on generic listing standards for token-based ETFs that would eliminate individual rule-change requests.

Generic approach

The proposed system would allow ETF sponsors to bypass the customary FORM 19b-4 process when underlying tokens meet predetermined criteria.

Under the proposed framework, sponsors would submit registration statements on Form S-1, observe standard 75-day review periods, and list products once waiting periods conclude. 

Market capitalization, on-exchange trading volume, and daily liquidity rank among the metrics under discussion.

Seyffart called the generic standard approach “very good news for the crypto ETF space,” arguing it would offer “clear rules of the road.” 

Balchunas described the concept as “what everyone wants, what makes sense, and what we think will happen.”

As a result, the first altcoin-related ETF approvals might likely start only in October.