SEC Approves Fast-track For Crypto ETPs Amid Debate

The U.S. Securities and Exchange Commission (SEC) has approved a major rule change allowing exchanges to adopt generic listing standards for certain exchange-traded products (ETPs), including digital assets. The decision effectively creates a “fast-track” pathway for new digital asset ETPs, eliminating the traditional case-by-case SEC approval process.

For the crypto industry, this marks a historic milestone. For years, the SEC delayed or denied applications for digital asset ETPs, particularly spot Bitcoin ETFs. The first such ETF was only approved in January 2024 after a landmark court ruling.

The new framework mirrors the 2019 ETF Rule, which streamlined approvals for stock and bond ETFs. Similarly, the digital asset ETP rule is expected to accelerate product launches, potentially including Solana (SOL), XRP, Dogecoin (DOGE), and Cardano (ADA), alongside Bitcoin and Ethereum.

Still, the change has sparked criticism. SEC Commissioner Caroline Crenshaw, in a dissenting statement, argued the agency is “passing the buck” on investor protection by speeding up what she considers still-nascent products.

Crenshaw emphasized the risk of investor confusion, noting that while all ETFs are ETPs, not all ETPs are ETFs. ETFs are governed by the 1940 Investment Company Act, which provides safeguards such as independent board oversight and regular SEC exams. By contrast, ETPs under the 1933 Securities Act lack those protections.

She warned that investors may mistakenly believe these fast-tracked digital asset ETPs offer the same protections as traditional ETFs, which she described as “legally incorrect and practically dangerous.”

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