The U.S. Securities and Exchange Commission (SEC) has initiated a public consultation on how to regulate novel exchange-traded funds (ETFs), particularly those tied to cryptocurrencies and prediction markets. The move comes after a surge in crypto ETF approvals under SEC Chair Paul Atkins, who assumed leadership in April 2025 and has since greenlit dozens of funds beyond Bitcoin and Ethereum, including those tracking Solana (SOL) and Dogecoin (DOGE).
The SEC is seeking comment on whether current registration processes and listing standards are adequate for these innovative products. Key questions include whether ETFs investing in non-security assets (such as certain crypto or prediction market contracts) qualify as investment companies under the Investment Company Act, and whether the “Subjective Test” for such classifications needs refinement. The regulator is also reviewing competitive filing practices, including whether to implement a minimum registration fee to deter copycat filings and whether to allow confidential filings for part of the 75-day review period.
The consultation specifically references pending ETF applications from asset managers like Roundhill, Bitwise, and GraniteShares, which seek to offer funds tracking prediction market contracts on platforms like Polymarket. These applications remain stalled as the SEC evaluates their fit within existing securities rules. Chair Atkins previously stated the agency would consider these in a “transparent and thoughtful manner.”
The public comment period will last 60 days. The SEC also has other crypto-related reviews underway, including work with the Commodity Futures Trading Commission on perpetual futures regulation and guidance on tokenized securities.
