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SEC Releases New Guidelines for Encryption ETF: Are Solana, XRP, and Meme Coin ETFs Expected to Accelerate Listing?
The U.S. Securities and Exchange Commission (SEC) recently released new guidelines regarding the disclosure requirements for crypto asset-related exchange-traded products (ETPs), marking the first step towards approving dozens of ETF applications related to Solana, XRP, and the meme coin named after President Donald Trump. This guideline, released last Tuesday, not only reflects a significant shift in the Republican leadership's approach to how the U.S. top market regulator handles the crypto asset field, but also indicates that the crypto asset ETF market is about to enter a new stage of development.
1. SEC's New Guidelines: A Turning Point in the Regulation of Crypto Assets ETFs
The SEC has launched a special task force to draft new regulations, refocusing its Crypto Assets enforcement team, and has paused or completely abandoned several high-profile enforcement cases that many believe the agency was winning. This 12-page document is the first part of a new framework for cryptocurrency funds being designed by the staff of the U.S. Securities and Exchange Commission (SEC). Insiders say that asset management firms are also looking forward to guidance from the SEC's trading and markets division on how to streamline the application process. This should accelerate the speed at which new products come to market.
Sui Chung, the CEO of crypto index provider CF Benchmarks, stated that "the SEC is developing a framework to determine how to incorporate all these crypto assets into investment funds" to address the "surge" in the number of ETFs currently awaiting regulatory decisions.
Matt Hougan, Chief Investment Officer of Bitwise Asset Management, stated: "The most interesting and important point about this guidance is that it actually exists." The company has over six crypto ETFs awaiting approval from the SEC. He believes: "This indicates that the SEC recognizes that crypto ETPs are becoming part of the mainstream, and thus it is trying to establish rules to save time and hassle for issuers and SEC staff."
The SEC guidelines clearly state that, in order to obtain approval, issuers must clearly explain all the factors that make the Crypto Assets ETF unique in "simple and easy to understand English", such as custody arrangements and the risks of a hyper-competitive environment.
2. Simplified Listing Process: A Breakthrough from 240 Days to 75 Days
However, the next document may be even more important. According to several insiders, they cannot publicly comment due to the confidentiality of the relevant procedures. SEC staff are seeking to create a new listing template to replace the current practice where exchanges must submit special forms each time they want to launch a new crypto asset.
The form is called 19(b)4, requesting an exemption from the current listing rules for specific ETFs. Canceling the procedure could shorten the time interval between application and listing from up to 240 days to just 75 days. A senior executive at an issuer stated, "The SEC is seeking a general rule applicable to all listings and is currently in repeated discussions with exchanges about the specific wording." He also added that he expects exchanges to submit such general documents "in a few days or weeks."
3. The Delay of Solana ETF and Indirect Listing Strategy
Although the ETFs linked to the spot prices of all coins such as XRP, Polkadot, Dogecoin, and Trump meme coin are waiting for a decision from the SEC, issuers expect that the next batch of crypto products will be linked to the world’s sixth-largest crypto asset, Solana. The issuers stated that this may not happen until after the SEC releases the second part of its guidance, thus pushing the release date to early autumn.
However, some asset managers did not wait. Last week, REX Financial and Osprey Funds adopted a more indirect and complex approach to launch the first U.S. ETF that allows investors to invest in Solana—REX-Osprey Sol + Staking ETF. Unlike the six Solana spot ETFs currently awaiting approval, this ETF invests in a separate entity that will simultaneously hold Solana and a non-U.S. Solana fund. This structure means that REX can bypass the rules governing the management of these commodity funds and surpass other issuers, while also providing returns to investors through the cryptocurrency "staking" mechanism.
REX Financial CEO Greg King told Reuters: "We do believe the SEC is making significant strides in handling Crypto Assets, but it is still the SEC, and not everything has been codified into law." King acknowledged that he is trying to get ahead in the market share battle for new products on Solana, which is expected to be fierce. King stated that the new ETF attracted $12 million in assets on its first trading day on Wednesday, July 1. "Once these rules are in place, we may also launch a Solana ETP," he added. "In this case, there is no either-or choice."
Conclusion:
The new guidelines for cryptocurrency ETFs released by the SEC mark a shift in its regulatory attitude from strict enforcement to proactive rule-making, paving the way for the large-scale listing of cryptocurrency ETFs. Although challenges remain, efforts to streamline the listing process and the market's enthusiasm for emerging crypto assets such as Solana suggest that cryptocurrencies will accelerate their integration into mainstream financial markets.