SEC approves generic listing standards for crypto ETFs

• The SEC stated that it has approved the generic listing standards proposed by top US exchanges for commodity-based ETFs.
• Exchanges may list and trade commodity-based trust shares that meet listing standards without filing a rule change with the SEC.
• The agency also approved the listing and trading of Grayscale's Digital Large Cap Crypto Fund.

The Securities and Exchange Commission (SEC) approved generic listing standards for commodity-based trust shares on Nasdaq, Cboe, and the NYSE, allowing these exchanges to list such products without going through the normal ETF waiting process.

SEC green lights generic ETF listing standards for Nasdaq, Cboe and NYSE

The US SEC approved standards that could accelerate the approval of spot crypto exchange-traded funds (ETFs), according to a statement on Wednesday. 

The approval centers on generic listing standards for commodity-based trust shares on Nasdaq, Cboe, and the New York Stock Exchange. It allows these exchanges to list such products under uniform requirements rather than filing individual applications under Rule 19b-4.

"By approving these generic listing standards, we are ensuring that our capital markets remain the best place in the world to engage in the cutting-edge innovation of digital assets," said SEC Chair Paul Atkins.

Under the new listing standards, commodities must either trade on a market that is an ISG member, serve as the basis for a futures contract listed on a designated contract market for at least six months, or be tied to an ETF providing at least 40% exposure to the asset.

If an ETF does not meet any of the listing standards, the exchange must file a separate rule proposal with the SEC before it can list and trade the product.

"This approval helps to maximize investor choice and foster innovation by streamlining the listing process and reducing barriers to access digital asset products within America's trusted capital markets," Atkins added.

The agency added that the changes will enable it to evaluate the proposals more effectively and ensure they align with the requirements of the Exchange Act for national exchanges.

The approval comes as crypto ETF applications for assets such as XRP, Solana, Avalanche, Dogecoin, and Litecoin have piled up at the SEC over the past year. With an October deadline approaching, the agency has spent recent months developing the generic listing standards.

Bloomberg senior ETF analyst Eric Balchunas stated in an X post that the approvals could lead to "north of 100 crypto ETFs launched in the next 12 months." He also mentioned more than 10 cryptocurrencies that are eligible for ETF listings with over six months of futures trading on the Coinbase Derivatives Exchange.

On the contrary, Bloomberg analyst James Seyffart shared concerns regarding the new listing standards, noting that additional requirements should be included before products can begin trading.

"There should probably be some sort of additional requirements other than 'if you have a futures contract, you're good,'" he said.

Furthermore, the SEC announced that it has approved Grayscale's Digital Large Cap Fund (GDLC), which aims to provide exposure to a diversified portfolio of digital assets with larger market capitalizations. GDLC aims to become the first multi-crypto ETF to begin trading in the US, offering exposure to Bitcoin, Ethereum, XRP, Solana and Cardano.