Grayscale, Andreessen Horowitz and the Crypto Council for Innovation are pressing the U.S. Securities and Exchange Commission to preserve existing fund classifications instead of imposing a broad regulatory category for so-called novel exchange-traded products. Their letters, dated August 31, arrived near the end of a 60-day consultation launched in June, which asked whether existing rules adequately protect investors and whether registration procedures should change for products spanning crypto, private assets, event contracts and leveraged strategies.
Andreessen Horowitz argued that crypto ETPs now benefit from more mature market infrastructure, including exchange-approved listing standards and established disclosure requirements. The firm asked the SEC to evaluate products according to underlying characteristics, coordinate fund-registration and exchange-listing reviews, and use more predictable timelines. Grayscale similarly warned against new portfolio conditions or disclosure regimes for digital-asset products that already operate with established compliance practices. CCI called for comparable regulatory efficiencies for non-ETF ETPs and said the SEC should refrain from updating the definition of investment company.
The submissions revealed disagreements on key details. Andreessen Horowitz proposed reserving the ETF label for funds regulated under the Investment Company Act of 1940, while Grayscale said the term should describe economic characteristics regardless of legal wrapper. CCI favored clearer disclosure of registration status rather than a redesign. Charles Schwab opposed a fully confidential pre-filing process and proposed that any resulting filing be public for at least 75 days before effectiveness. Chainalysis said public blockchains could support real-time surveillance, verifiable portfolio data and machine-readable disclosures. Kalshi argued event contracts should remain eligible for registered funds, but consumer group Public Citizen warned those products would place gambling-like exposure inside a vehicle retail investors associate with long-term investing.
The SEC first allowed a U.S. Bitcoin futures ETF in October 2021 and approved spot Bitcoin ETFs in January 2024. The current consultation could shape future digital-asset product applications, especially whether products holding non-securities are automatically brought under the Investment Company Act simply because regulators consider them novel.
