SEC Proposes 75-Day Crypto ETF Approval Timeline for Faster Listings

US Regulator Considers Streamlined Process to Accelerate Token-Based ETF Approvals

The US Securities and Exchange Commission is exploring a new framework that could dramatically reduce crypto ETF approval timelines from the current 6-8 months to just 75 days. This proposed streamlined process would eliminate the traditional 19b-4 rule-change requirement for qualifying token-based exchange-traded funds.

Key Highlights of the Proposed Changes

The SEC's potential new approach centers on three major modifications to the current approval process:

Elimination of 19b-4 Process: Token-based ETFs meeting specific criteria could bypass the traditional dual-track approval system that currently requires both 19b-4 rule changes and S-1 registration filings.

Simplified 75-Day Timeline: Qualifying issuers would only need to file S-1 registration statements and wait approximately 75 days for approval, significantly reducing regulatory friction.

Focus on Disclosure Standards: The new framework would prioritize comprehensive disclosure requirements over exchange rule modifications, streamlining the regulatory review process.

Current Crypto ETF Approval Process Creates Extended Delays

The existing crypto ETF approval system involves multiple regulatory hurdles that create substantial delays for issuers. Under current procedures, the SEC conducts two separate 45-day review periods under Rule 19b-4, totaling 90 days before even considering the S-1 registration filing.

When combined with S-1 review periods and potential objections, the complete approval process typically extends between six to eight months. This lengthy timeline has created uncertainty for crypto asset managers and delayed the integration of digital assets into traditional financial markets.

The proposed 75-day pathway would eliminate the 19b-4 component entirely, focusing solely on S-1 registration requirements. This change could provide consistent, predictable timelines for qualifying crypto ETF applications.

Token Eligibility Standards Remain Under Development

While the proposed framework offers faster approval timelines, specific eligibility criteria for tokens remain unclear. Industry experts anticipate that qualifying digital assets may need to meet minimum thresholds across several key metrics:

Market Capitalization Requirements: Tokens may need to maintain minimum market cap levels to demonstrate market stability and investor interest.

Liquidity Standards: Sufficient trading volume and market depth could be required to ensure effective ETF operations and investor protection.

Trading Volume Thresholds: Consistent trading activity across multiple exchanges may be necessary to qualify for streamlined approval.

These standards would likely favor established cryptocurrencies with mature market infrastructure over newer or smaller digital assets.

Regulatory Shift Signals Greater Crypto Market Integration

The SEC's consideration of streamlined crypto ETF approvals represents a significant evolution in regulatory approach toward digital assets. This potential policy change suggests the regulator may be moving toward greater acceptance of cryptocurrency-based financial products.

Enhanced Market Predictability: A consistent 75-day approval window would provide issuers with clearer planning timelines and reduce regulatory uncertainty.

Increased Competition: Faster approval processes could encourage more asset managers to develop crypto ETF products, potentially benefiting investors through increased options and competitive fees.

Mainstream Financial Integration: Accelerated ETF approvals could help bridge traditional finance and cryptocurrency markets more effectively.

Industry Impact and Future Implications

The proposed changes could significantly benefit established crypto asset managers and exchanges with mature digital asset offerings. Companies like Bitwise, which recently faced delays with Ethereum staking ETF proposals, could see faster resolution of future applications under the new framework.

Financial institutions have been increasingly interested in crypto ETF products as institutional demand for digital asset exposure continues growing. A more efficient approval process could accelerate this trend and bring additional cryptocurrency investment products to market.

However, the SEC has not provided official confirmation of these proposed changes, and implementation timelines remain uncertain. Industry observers expect more details to emerge as the regulator continues working with exchanges to develop specific standards and requirements.

Conclusion

The SEC's potential shift toward a 75-day crypto ETF approval process represents a meaningful step toward more efficient digital asset regulation. While specific eligibility requirements and implementation details require clarification, this development signals growing regulatory recognition of cryptocurrency's role in modern financial markets.

If approved, these changes could accelerate crypto ETF development and provide investors with expanded access to digital asset investment products through traditional brokerage accounts. The streamlined process may also encourage innovation in cryptocurrency-based financial products while maintaining appropriate investor protections.