- The Cboe BZX Exchange is asking the SEC to replace the current individual crypto ETF approval process with a single set of listing rules.
- The framework would significantly reduce paperwork and delays, streamlining the launch of future Bitcoin, Ethereum, and other crypto-based exchange-traded products that meet the new criteria.
- This push for efficiency comes shortly after the SEC approved in-kind creation and redemption mechanisms for crypto ETFs and amid the regulator’s inconsistent approach, as seen with the recent pauses on Bitwise’s and Grayscale’s ETF conversions.
The Chicago Board Options Exchange is seeking to overhaul how crypto ETFs get the green light in the US, asking the Securities and Exchange Commission (SEC) to scrap the current one‑by‑one approval process in favour of a single set of listing rules.
In the filing, the CBOE proposed allowing any crypto fund that meets preset conditions to launch without the exchange having to submit a fresh 19b‑4 application for each product.
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ETF specialist Nate Geraci noted that it would sharply cut down the paperwork and delays that have slowed product launches in the sector.
Cboe just filed 19b-4 requesting a rule change which would allow crypto ETFs to list & trade under a standard framework. In other words, issuers wouldn’t have to request specific approval for each crypto ETF as long as it meets certain criteria.
Nate Geraci, President at NovaDius WealthAt present, every new crypto ETF triggers a separate review process, which can drag on for up to 240 days.
Proposal to Include Bitcoin, Ethereum and Other Appropriate Altcoins
Although the proposal does not single out any product, its parameters could apply essentially to future ETFs holding Bitcoin, Ethereum, or other digital assets that satisfy the requirements. In this framework, the process could be streamlined with basic requirements, such as surveillance procedures, trading halt rules, and minimum thresholds for shares outstanding, market value, and public disclosures, etc.
The push comes just a day after the SEC signed off on in‑kind creation and redemption mechanisms for crypto ETFs, as Crypto News Australia reported. This narrows the gap between how these products operate and the structure long used by traditional equity and commodity funds.
The need for a more efficient and smooth process also comes from a lot of back and forth by the regulator regarding its approach towards reviewing and approving crypto investment vehicles. Recently, the SEC paused Bitwise’s ETF conversion request, shortly after approving it, as it did with Grayscale.
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