WASHINGTON — The Securities and Exchange Commission is weighing two structural changes to crypto ETF approvals that pit asset managers against traditional brokers: whether filings should stay confidential during review and how fast the agency must greenlight new funds.
The SEC requested comment on 27 questions about "Novel ETFs"—products that track crypto assets and other unconventional strategies. Two decisions will dictate deployment speed and product quality.
**The confidentiality battle**
Grayscale, which operates 18 crypto exchange-traded products, wants filings locked from public view until trading begins. The firm argues confidentiality would "reduce the incentive for competing sponsors to file imitative or duplicative registration statements." The Crypto Council for Innovation backs this stance, citing AI-assisted copying as a problem that stalls real innovation.
The SEC itself flagged the issue: "several Novel ETF filings submitted in rapid succession" arrive nearly identical, signaling competitors reverse-engineer submissions.
Charles Schwab, managing $13 trillion in client assets, opposes full confidentiality. Public filings let the firm educate its investor base before launch. Schwab proposed a compromise: if the SEC reviews a filing confidentially, it must then release it publicly for at least 75 days before the fund goes live—giving brokers preparation time.
**The approval speed showdown**
Grayscale is pushing for a hard 45-day deadline on SEC responses. Andreessen Horowitz and the Crypto Council for Innovation back faster timelines. Jane Street opposes acceleration, arguing rushed approvals could spawn low-quality, illiquid products and destabilize markets.
The speed fight has operational teeth. Grayscale and A16z want quicker order processing—same-day handling of creation and redemption instructions. Schwab and Jane Street worry faster mechanics could compromise market integrity.
A third pressure point: most U.S. crypto products are trusts, not legally defined ETFs, and lack the 75-day automatic effectiveness window that shields ETF sponsors. The Crypto Council is asking the SEC to extend that protection to crypto trusts, guaranteeing sponsors a predictable launch date.
