US SEC’s New Guidance Marks First Step Toward Regulating Crypto ETFs
By Suzanne McGee | July 7, 2025
In a significant move poised to reshape the cryptocurrency investment landscape, the U.S. Securities and Exchange Commission (SEC) released new guidance addressing disclosure requirements for exchange-traded products (ETPs) linked to cryptocurrencies. This development marks the first decisive step toward establishing a formal regulatory framework for crypto exchange-traded funds (ETFs), potentially clearing the path for approval of dozens of applications tied to coins such as Solana, XRP, and even President Donald Trump’s eponymous meme coin.
A Shift in Regulatory Approach Under Republican Leadership
Issued on July 1, the 12-page document signals a notable change under the SEC’s Republican leadership in how the agency approaches cryptocurrency products. The regulator has recently launched a dedicated task force assigned to draft comprehensive new rules, refocused its crypto enforcement team, and notably paused or abandoned several high-profile enforcement cases previously perceived as major wins.
Industry insiders view these actions as a strategic pivot toward accommodating the burgeoning crypto market more effectively. Sui Chung, CEO of crypto index provider CF Benchmarks, noted, “The SEC is moving forward on creating a framework for how they’d like to see all these crypto assets included in investment funds,” responding to the “explosion” in ETF applications now under SEC review.
Key Highlights of the SEC’s New Guidance
The guidance sets clear expectations for issuers of crypto-based ETFs. Issuers must present all factors that distinguish these products in easily understandable language (“plain English”). This includes details on custody arrangements, risk disclosures given the intensely competitive environment, and other specifics pertinent to crypto assets.
Matt Hougan, Chief Investment Officer at Bitwise Asset Management—which currently has more than half a dozen crypto ETFs awaiting SEC approval—emphasized the significance of just having a regulatory framework in place: “It suggests that the SEC acknowledges that crypto ETPs are becoming part of the mainstream, and so it’s trying to lay down rules of the road to save both issuers and SEC staff time and hassle.”
Moving Toward Streamlined ETF Product Approvals
Perhaps the most consequential development lies ahead. The SEC staff is reportedly working on drafting a new general listing template aimed at simplifying the process for exchanges listing crypto ETFs. Presently, exchanges must submit a specialized 19(b)4 filing for each new offering—effectively requesting exemptions from existing listing rules—a process that can delay product launches by up to 240 days.
Eliminating this requirement and replacing it with a general rule applicable across all crypto ETF listings could cut approval and launch times to around 75 days, significantly accelerating market entry. Sources familiar with the discussions, speaking under confidentiality, indicated ongoing negotiations over exact wording, but expect exchanges to file updated applications in the coming weeks.
Exchanges such as Nasdaq and Cboe declined to comment on these discussions, and the SEC also refrained from public commentary.
Upcoming Product Launches and Innovative Structures
As blockchain technology and crypto assets continue to diversify, issuers anticipate the next wave of SEC-reviewed ETFs will involve Solana, currently the sixth-largest cryptocurrency by market capitalization. However, debuting new products tied directly to Solana will likely wait until after the SEC issues its forthcoming guidance expected in early autumn.
In the meantime, a few asset managers are adopting alternative approaches to gain market advantage. Last week, REX Financial and Osprey Funds launched the REX-Osprey Sol + Staking ETF (traded under ticker SSK.Z), the first U.S. ETF offering exposure to Solana via an indirect structure. Instead of holding Solana outright, this fund invests in a separate entity that owns both Solana and a non-U.S. Solana fund, allowing it to bypass certain commodity fund regulations and provide investors with additional yield through “staking.”
Staking involves cryptocurrency holders participating in blockchain validation processes, receiving transaction fees or newly minted coins as compensation for helping secure the network.
Greg King, CEO of REX Financial, explained, “We do think the SEC is taking big steps forward in dealing with cryptocurrency, but it’s still the SEC, and not everything has been codified yet.” King added that while their ETF drew $12 million on its first trading day, they plan to launch a more direct spot Solana ETP once the formal rules are finalized. “There’s no either/or in this situation,” he said.
Outlook for Crypto ETFs in the United States
The SEC’s recent guidance and efforts to streamline listing processes reflect a broader evolution in regulatory attitudes toward cryptocurrencies and related investment products. As issuers prepare for an anticipated influx of approvals and product launches in the coming months, investors can expect a more robust and competitive crypto ETF market emerging in the United States.
While challenges remain and certain regulatory questions await formal codification, the SEC’s latest actions provide a clearer pathway for integrating crypto assets into mainstream investment portfolios through regulated channels.
Reporting by Suzanne McGee; additional contributions by Chris Prentice; editing by Alden Bentley and David Gregorio.