The recent directive from the U.S. Securities and Exchange Commission (SEC) instructing issuers of proposed spot exchange-traded funds (ETFs) for Litecoin, XRP, Solana, Cardano, and Dogecoin to withdraw their pending Form 19b-4 filings has sparked a significant shift in the cryptocurrency market. This move comes on the heels of the SEC’s approval of generic listing standards on September 18, which aims to streamline the process for bringing new cryptocurrency ETFs to market.
The SEC’s instruction does not signify a setback for issuers but rather reflects a procedural change that eliminates the need for individual exchange rule changes for each token. Under the new framework, exchanges like Nasdaq, Cboe BZX, and NYSE Arca can list crypto ETFs under generic rules as long as they meet predefined criteria. This new process allows issuers to move forward directly with S-1 registration statements, the final step before an ETF can be launched.
Withdrawals of the now-unnecessary 19b-4 filings are expected to commence this week, with several looming deadlines for existing applications in October. At least 16 proposals covering tokens beyond Bitcoin and Ethereum are currently under SEC review, indicating a growing interest in expanding the cryptocurrency ETF market.
The SEC’s approval of generic standards aims to create a stable platform for digital asset ETFs while providing exemptions that promote on-chain capital market development. SEC Chair Paul Atkins emphasized that the new framework reduces barriers while ensuring investor protection, fostering innovation without compromising oversight.
For issuers such as Grayscale, 21Shares, and VanEck, the procedural change is significant as it eliminates the lengthy dual approval process previously required for each product. With generic standards in place, approval timelines can be significantly shortened, potentially as brief as 75 days.
The SEC has already put the new framework into practice by approving Grayscale’s Digital Large Cap Fund (GDLC) on September 18. This marks the first multi-crypto exchange-traded product to list under the streamlined system, offering exposure to Bitcoin, Ether, XRP, Solana, and Cardano. With over $915 million in assets under management, GDLC’s approval represents a milestone for multi-asset crypto products in the U.S. market.
As the SEC faces a wave of upcoming crypto ETF deadlines, with over 92 applications pending review, the market is eagerly anticipating decisions on proposals such as Franklin Templeton’s Solana and XRP ETFs. Despite extensions and delays, analysts project a high likelihood of approval for these ETFs before year-end.
The regulatory landscape is evolving rapidly, with the SEC coordinating with the Commodity Futures Trading Commission (CFTC) on broader digital asset regulation. A joint roundtable is planned to align approaches across agencies, part of Chair Atkins’ “Project Crypto” initiative to modernize securities rules for the digital era.
Overall, the withdrawal of 19b-4 filings signifies a shift towards standardized procedures in the cryptocurrency ETF market, offering faster paths to market for a variety of digital asset products. The regulatory environment is adapting to accommodate the growing interest in cryptocurrency investments, paving the way for continued innovation and market expansion.