Crypto Leaders Push SEC for ETF Rule Overhaul

Crypto leaders and traditional finance (TradFi) executives are urging the SEC to revise its ETF rules to enable a wider array of altcoin and meme coin products on Wall Street.

During a closed-door meeting with the SEC’s new crypto task force on Friday, representatives from firms such as Coinbase, Andreessen Horowitz, and Fidelity advocated for an overhaul of ETF policies, as per the publicly filed meeting notes.

The companies, members of the Crypto Council for Innovation, an industry lobbying group, proposed expanding the current ETF-related standards. Presently, only crypto assets traded in markets regulated by the SEC or CFTC—like Bitcoin and Ethereum—can be traded on Wall Street via ETFs.

Should the influential firms’ requests materialize, significant changes could follow. They are asking the SEC to broaden the definition of a regulated market to encompass a “range of existing crypto trading platforms.”

This shift in language could have major implications, essentially calling for any crypto asset traded on platforms like Coinbase to be fast-tracked for ETF approval.

This would lower the current standards governing the ETF market. If companies like Coinbase and Fidelity succeed, products such as Solana, XRP, and Dogecoin ETFs could soon appear on Wall Street, among others.

The memo submitted acknowledged that such changes could lead to “a new wave” of crypto ETFs for retail traders, effectively merging the volatile meme coin market with the traditional American economy.

The Crypto Council for Innovation further requested that the SEC allow ETF issuers to buy and sell crypto directly, participate in staking digital assets, and earn staking rewards. Currently, firms like Fidelity and BlackRock do not custody the BTC and ETH tied to their products, nor do they accrue yield from staking.

Prior to the meeting with the larger group, Fidelity had a one-on-one with the SEC’s crypto task force where they discussed standardizing rules for listing crypto ETFs and clarifying the ability to collect staking rewards.

In the larger meeting, companies also urged the SEC to declare products like stablecoins and NFTs as non-securities and to exclude offerings such as airdrops from its jurisdiction.

Edited by Andrew Hayward