Grayscale, 21Shares Propose Confidential Filings to Speed SEC ETF Reviews

Crypto firms including Grayscale, 21Shares and Andreessen Horowitz are pressing the U.S. Securities and Exchange Commission (SEC) to streamline parts of its review process for novel exchange-traded products, with proposals ranging from confidential draft registrations to shorter regulatory response times.

The push comes as the SEC considers how it should handle novel ETFs and has sought feedback on whether artificial intelligence may be contributing to multiple applications being filed in rapid succession with largely identical features.

Grayscale proposed an optional process that would let sponsors submit draft registrations confidentially before public filing. The crypto asset manager said such an approach could reduce the incentive for rival sponsors to rush to replicate a proposed product or file similar applications. It also asked SEC staff to respond within 45 days.

21Shares backed a similar confidential approach, citing how quickly competitors can replicate information once an application becomes public.

Andreessen Horowitz, or a16z, focused on how long the review process takes. The firm argued that the process could be shortened because filings are submitted electronically, much of the disclosure follows standardized formats, and recurring questions arise across different products. It also said financial markets operate on shorter timelines than the current review period.

At the same time, a16z said accelerating the process should not reduce the depth of the SEC’s review.

Other market participants raised concerns about some of the proposed changes.

Jane Street said pressure to bring an ETF to market quickly could lead to rushed registrations and leave sponsors with less opportunity to seek market-maker input on liquidity and fund structure. The firm also proposed requiring an ETF to have at least two authorized participants at launch. Authorized participants facilitate the creation and redemption of ETF shares.

Charles Schwab opposed making the registration process entirely confidential. Under its proposal, any filing discussed privately between a sponsor and SEC staff would have to become public at least 75 days before the fund takes effect.

NYSE, meanwhile, raised a separate timing issue involving products that have reached exchanges. The exchange said SEC staff can ask an exchange to delay a listing during its review of an issue without providing a definite timetable, even as another exchange may still be able to proceed. NYSE asked for greater predictability around those timelines.

Beyond filing procedures and review timelines, the SEC review also prompted crypto firms to seek broader changes affecting spot crypto products.

Multicoin Capital asked the regulator to permit qualifying staking receipt tokens in spot crypto ETPs, including structures in which those tokens could potentially represent all of a product’s digital asset holdings substantially. Staking receipt tokens represent crypto assets that have been staked to generate rewards.

The Jito Foundation, Jito Labs and the Solana Policy Institute joined Multicoin in calling for the SEC to establish rules allowing spot crypto products to use staking receipt tokens.

Comments on the SEC request were due Aug. 31. The regulator has nevertheless continued to post submissions dated after the deadline and has not established a timetable for further action.