The crypto industry urges the SEC to avoid one-size-fits-all restrictions on new ETFs.

ChainCatcher report, according to Cointelegraph, crypto industry participants including a16z, Grayscale, and the Crypto Council for Innovation (CCI) have urged the U.S. Securities and Exchange Commission (SEC) to avoid applying a blanket restriction on “novel” exchange-traded funds (ETFs), and instead evaluate such products based on their individual risk parameters. Three comment letters were submitted on August 31, just as the SEC’s 60-day public comment period on the regulation of novel ETFs was nearing its end. The SEC initiated this consultation on June 30, seeking input on whether existing regulations are adequate, how such funds should be regulated, and whether the registration process requires adjustment. a16z argued that crypto-based ETPs now benefit from more mature market infrastructure—including exchange-approved listing standards and established disclosure requirements—and therefore should not be grouped together with products holding private assets or employing other novel strategies. Grayscale similarly contended that digital asset products with a proven track record of compliance and disclosure should not face new portfolio conditions or disclosure regimes solely because they are labeled “novel.” The CCI called for comparable regulatory efficiency between ETFs and non-ETF ETPs while preserving existing investor protections. All parties generally oppose categorical regulatory changes that could impose additional requirements or delay product listings, though they differ on classification, approval processes, and terminology. The debate over the ETF label is particularly pronounced: a16z proposes reserving the term “ETF” exclusively for funds registered under the 1940 Investment Company Act, while Grayscale argues that “ETF” should describe economic characteristics rather than legal structure.