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SEC's new standards streamline crypto ETF approvals

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Grayscale's multi-coin ETF benefits from revised rules

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Uncertainty lingers over demand for diverse crypto ETFs

By Suzanne McGee and Hannah Lang

Sept 24 (Reuters) - Asset managers are lining up to

launch cryptocurrency exchange-traded funds, capitalizing on

growing excitement around digital assets while getting a boost

from looser regulatory requirements to bring products to market.

The U.S. Securities and Exchange Commission's updated

standards for ETFs, announced last week, could encourage demand

for exchange-traded products tied to cryptocurrencies ranging

from solana to dogecoin.

ETFs around the more traditional cryptocurrencies bitcoin

and ethereum were launched in 2024 under prior rules that had

stricter standards for issuers and exchanges.

There are 21 U.S. ETFs that own either bitcoin or ethereum,

or a combination of both, and scores of filings with the SEC for

new products tied to other coins.

Analysts said they expect the first products approved under

the new rules - likely ETFs tied to cryptocurrencies solana and

XRP - to debut in early October.

"We've got about a dozen filings with the SEC now, and more

coming," said Steven McClurg, founder of Canary Capital Group, a

digital assets investment management firm that designs and

launches ETFs. "We're all getting ready for a wave of launches."

Since the SEC first unveiled the proposed new listing

standards in July, firms have scrambled to update their new

product filings and respond to specific comments and questions

from the SEC.

A final wave of amendments could be filed by the end of this

week, said three people familiar with the matter, who asked not

to be named.

"Those filings are pretty far along in the review process,"

said Teddy Fusaro, president of Bitwise, a crypto asset manager.

"These are the rules we had been anticipating."

The SEC did not respond to a request for comment.

The vote last week by the SEC to adopt new listing standards

eliminates the need for individual regulatory review of each

crypto ETF application, allowing products that meet

predetermined standards to launch without a lengthy case-by-case

approval process. That will slash the approval time for new

crypto products to 75 days or less, from up to 270 days

previously, industry sources said.

The fourth quarter of 2025 is shaping up as boom time for

crypto ETF issuers, said Jonathan Groth, a partner at DGIM Law.

Grayscale Investments was first out of the gate, rolling out

its new Grayscale CoinDesk Crypto 5 ETF less than 48

hours after the SEC last week allowed its conversion from a

private to publicly traded fund.

The Grayscale ETF owns bitcoin and ethereum, the two coins

for which spot ETFs already exist, and also XRP, solana and

cardano.

Peter Mintzberg, CEO of Grayscale, said its new ETF approval

reflected Grayscale's advocacy for "public market access,

regulatory clarity and product innovation."

SPEED TO MARKET

To benefit from the new, speedier process, an ETF must meet

at least one of three principal criteria. If the coin

underpinning the proposed ETF already trades on a regulated

market or has futures contracts regulated by the U.S. Commodity

Futures Trading Commission that have traded for at least six

months, it qualifies.

Alternatively, the existence of another ETF tied to that

coin that has at least 40% of its assets invested in the

cryptocurrency itself rather than options or swaps would open

the door to approval.

The CFTC declined to comment.

"Not all of our existing filings qualify," said Kyle DaCruz,

director of digital assets product at asset manager VanEck. "The

next step is to talk to our lawyers to see which products can

move forward and how rapidly will they get onto the market."

What remains unclear is the appetite for dozens of crypto

ETFs on lesser-known coins and how they might fit into investor

portfolios.

"There will be a flood of tokens that many folks have never

heard of, and instead of years as with bitcoin, there will be

weeks or months to provide that education," said DaCruz.