Key Takeaways
- • Major crypto industry groups—including the Crypto Council for Innovation, Grayscale, Andreessen Horowitz, and Franklin Templeton—submitted regulatory comment letters to the SEC on September 1, 2026 (the final deadline) requesting tailored rules for novel exchange-traded products spanning crypto, private assets, event contracts, and leveraged strategies.
- • The Crypto Council for Innovation explicitly requested that the SEC extend regulatory efficiencies currently available to ETFs registered under the Investment Company Act of 1940 to non-ETF exchange-traded products, arguing for "regulatory parity" to foster innovation and expand investor choice.
- • Industry commenters urged the SEC to assess products based on their underlying assets and risk profiles rather than applying uniform rules, while disagreeing internally on specific issues including event contracts, confidential filings, staking mechanisms, and retail investor safeguards.
- • The SEC initiated the "novel ETFs" comment period in June 2026, seeking input on whether existing rules adequately protect investors and whether registration procedures require modernization to accommodate emerging product categories.
- • Grayscale, Jane Street, Charles Schwab, Kalshi, Solana Policy Institute, and Chainalysis joined the push, indicating broad industry consensus on the need for regulatory framework updates despite disagreement on implementation details.
Summary
The cryptocurrency and digital asset industry launched a coordinated regulatory advocacy campaign on September 1, 2026, the final deadline for public comment on the SEC's "novel ETFs" initiative. Major market participants—including the Crypto Council for Innovation, asset managers Grayscale and Franklin Templeton, venture capital firm Andreessen Horowitz, trading firms Jane Street, and brokers including Charles Schwab—submitted letters requesting the SEC modernize its regulatory framework for emerging exchange-traded products.
The core argument centers on regulatory parity. The Crypto Council for Innovation stated that "just as the Commission has modernized rules to promote efficiencies for ETFs, the Commission should consider providing similar efficiencies for non-ETF ETPs to promote regulatory parity, foster innovation, and expand investor choice." Many spot cryptocurrency products currently operate under commodity-trust structures rather than registering as investment companies under the 1940 Act, creating structural differences from traditional ETFs. The industry seeks alignment of regulatory treatment across product types.
The SEC initiated the comment period in June 2026, explicitly requesting industry and stakeholder input on whether existing regulatory rules adequately protect investors and whether registration procedures require modification to accommodate novel products. The scope extends beyond cryptocurrencies to include private assets, event contracts, and leveraged strategies—reflecting the broadening landscape of exchange-traded instruments seeking regulatory clarity.
However, the submissions reveal internal disagreement within the crypto ecosystem. Commenters diverged on specific issues including treatment of event contracts, confidential filing requirements, staking mechanisms, and the appropriate level of retail investor safeguards. Additionally, the Crypto Council for Innovation urged the SEC to "refrain from updating the definition of investment company," warning that regulatory redefinition could introduce uncertainty without demonstrable investor benefits. This defensive posture suggests concern that expanded SEC authority over product classification could create unintended regulatory consequences.
The comment submissions signal that institutional crypto players view regulatory modernization as strategically urgent, yet industry consensus exists only on the principle of modernization—not its mechanics or scope.
The core argument centers on regulatory parity. The Crypto Council for Innovation stated that "just as the Commission has modernized rules to promote efficiencies for ETFs, the Commission should consider providing similar efficiencies for non-ETF ETPs to promote regulatory parity, foster innovation, and expand investor choice." Many spot cryptocurrency products currently operate under commodity-trust structures rather than registering as investment companies under the 1940 Act, creating structural differences from traditional ETFs. The industry seeks alignment of regulatory treatment across product types.
The SEC initiated the comment period in June 2026, explicitly requesting industry and stakeholder input on whether existing regulatory rules adequately protect investors and whether registration procedures require modification to accommodate novel products. The scope extends beyond cryptocurrencies to include private assets, event contracts, and leveraged strategies—reflecting the broadening landscape of exchange-traded instruments seeking regulatory clarity.
However, the submissions reveal internal disagreement within the crypto ecosystem. Commenters diverged on specific issues including treatment of event contracts, confidential filing requirements, staking mechanisms, and the appropriate level of retail investor safeguards. Additionally, the Crypto Council for Innovation urged the SEC to "refrain from updating the definition of investment company," warning that regulatory redefinition could introduce uncertainty without demonstrable investor benefits. This defensive posture suggests concern that expanded SEC authority over product classification could create unintended regulatory consequences.
The comment submissions signal that institutional crypto players view regulatory modernization as strategically urgent, yet industry consensus exists only on the principle of modernization—not its mechanics or scope.
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