The U.S. Securities and Exchange Commission (SEC) has announced modernization of the registration process for crypto exchange-traded products (ETPs) with new guidance aimed at creating a clearer system.
Update on Registration Requirements
On July 1, the SEC released a statement outlining what issuers should include when filing registration statements for crypto ETFs. The update does not introduce new rules but sets clearer expectations around net asset value calculation, custody practices, benchmark selection, and risk disclosures.
Transparency and Conflict of Interest Prevention
According to the guidance, issuers are expected to provide detailed information on how their crypto assets are stored, including whether private keys are held in hot or cold wallets, who has access, and what insurance protections are in place. The SEC also calls for greater transparency around service providers and potential conflicts of interest, such as whether the sponsor or its affiliates hold the underlying tokens.
Future of Crypto ETFs and New Standards
Recent reports suggest the SEC is in the early stages of creating a formal listing standard for crypto ETFs. The goal of the new approach is to create a faster, more predictable path for launching new ETFs, potentially simplifying the application process for tokens that meet key requirements.
Thus, the SEC's new directions for crypto ETF regulation may enhance market transparency and simplify the registration process for potential issuers.
