Crypto Leaders and TradFi Bigwigs Push SEC to Rewrite ETF Rules
In a recent closed-door meeting with the SEC’s new crypto task force, representatives from major digital assets firms, including Coinbase, Andreessen Horowitz, and Fidelity, advocated for a revamp of ETF regulations to allow a wider range of altcoin and meme coin-related products to enter Wall Street.
Expanding ETF Standards
The firms, members of the Crypto Council for Innovation, urged the SEC to broaden its current ETF standards, which currently only permit crypto assets like Bitcoin and Ethereum traded on SEC or CFTC-regulated markets to be included in ETFs.
They proposed expanding the definition of a regulated market to include a variety of existing crypto trading platforms, potentially opening the door for assets traded on platforms like Coinbase to be eligible for ETF approval.
Implications of the Proposed Changes
If the requested changes are implemented, we could see a wave of new crypto ETFs hitting the market, making it easier for retail traders to access a broader range of crypto assets. This move would also bring the volatile meme coin sector closer to traditional financial markets.
Additional Requests to the SEC
During the meeting, the companies also asked the SEC to allow ETF issuers to directly buy and sell crypto, participate in staking digital assets, and earn staking rewards. This would enable ETF providers to custody assets and generate yield from staking activities, a practice not currently permitted.
Furthermore, the firms requested clarity on the classification of products like stablecoins and NFTs as non-securities and the exclusion of crypto offerings like airdrops from the SEC’s oversight.
Collaboration with Fidelity
Prior to the meeting with the SEC, Fidelity engaged in one-on-one discussions with the agency’s crypto task force, focusing on standardizing rules for listing crypto ETFs and the collection of staking rewards by ETF issuers.
The proposed changes could revolutionize the ETF market, paving the way for a more diverse range of crypto assets to be traded on Wall Street and integrated into the traditional financial system.
Written and Edited by Andrew Hayward