Crypto Firms Tell SEC: Don’t Bundle Novel ETFs Into One Regulatory Bucket

Grayscale, Andreessen Horowitz (a16z), and the Crypto Council for Innovation (CCI) are pushing back against potential blanket restrictions on novel exchange-traded funds, urging the US Securities and Exchange Commission to evaluate crypto-linked products based on their individual risk profiles rather than sweeping them into a single regulatory category.

In comment letters dated Aug. 31 and published as the SEC closed a 60-day public consultation on next-generation ETFs, the three firms asked the agency to preserve existing investment-company classifications and avoid automatically pulling products holding non-securities into the Investment Company Act of 1940 framework. The SEC opened the comment window on June 30, soliciting feedback on whether current regulations adequately cover novel ETFs and whether registration or listing procedures need reform.

A16z recommended that the SEC tailor its approach to each product's underlying characteristics, coordinate fund-registration and exchange-listing reviews, and adopt more predictable timelines. The firm argued that crypto-based exchange-traded products (ETPs) now benefit from mature market infrastructure, including exchange-approved listing standards and established disclosure requirements, and should not be lumped together with funds holding private assets or pursuing other novel strategies. Grayscale echoed that position, contending that digital asset products with established compliance and disclosure track records should not face new portfolio conditions simply because they are labeled novel.

While the commenters broadly agreed on opposing categorical regulatory changes that could slow product launches, they diverged on specifics. A notable disagreement centered on the ETF label itself: a16z proposed reserving the term for funds operating under the Investment Company Act, whereas Grayscale argued the label should reflect a product's economic characteristics regardless of its regulatory classification. Both Grayscale and the CCI also backed an optional confidential pre-filing process to give issuers more certainty before going public with a fund application.