Major Shift in US Cryptocurrency Regulation! SEC's New Rules Pave the Way for Simplifying Approval Process, Expected to Drastically Shorten Time for Meme Coin ETF Listing.

The new regulations set by the U.S. Securities and Exchange Commission regarding disclosure requirements for trading products related to cryptocurrency mark the first step in approving dozens of applications for various cryptocurrency-related ETFs, ranging from Solana to Ripple to meme coins like the one named after U.S. President Trump. The guidance, released last Tuesday, signals a significant shift in how the Republican leadership is handling affairs in the cryptocurrency space. The SEC has established a working group to draft new regulations, restructured its cryptocurrency enforcement team, and paused or completely abandoned many high-profile enforcement cases that many believe the agency was likely to win. The 12-page document is the first part of the new framework for cryptocurrency funds that SEC staff is designing. According to sources familiar with the discussions, asset management companies also anticipate guidance from the SEC's Division of Trading and Markets on how to streamline the application process, which will expedite the listing of new products. Sui Chung, CEO of cryptocurrency index provider CF Benchmarks, stated, "The SEC is pushing forward to create a framework that clarifies how they want to incorporate all of these crypto assets into investment funds." This move aims to address the "surge" in the number of ETFs awaiting regulatory rulings. Industry insiders have not found too many surprises so far. Matt Hougan, Chief Investment Officer of Bitwise Asset Management, said, "The most interesting and important aspect of this guidance is that it actually exists. It shows that the SEC recognizes that cryptocurrency exchange-traded funds are becoming a mainstream part, so it is trying to set some rules to save time and effort for issuers and SEC staff." The company has over six cryptocurrency ETFs awaiting approval from the SEC. The SEC's guidance specifically states that issuers must clearly explain in "plain English" all the unique factors that distinguish cryptocurrency exchange-traded funds from others, such as custody arrangements and risks present in the competitive markets. However, the upcoming documents may hold more significance. According to sources familiar with the ongoing discussions, SEC staff are seeking to create a new listing template to replace the current requirement for exchanges to submit special forms each time they want to list a new cryptocurrency product. This form, known as 19(b)4, requires exemptions from current listing rules for specific exchange-traded funds. If this step can be eliminated, the time interval from application submission to product listing could be shortened from up to 240 days to just 75 days. A senior executive at an issuer stated, "The SEC is seeking a universal rule applicable to all listings and is currently collaborating with exchanges on specific wording." He added that he expects exchanges to submit such universal applications "in a matter of days or weeks." Officials from NASDAQ and the Chicago Board Options Exchange declined to comment on these discussions; the New York Stock Exchange did not respond to requests for comment. A spokesperson for the SEC also declined to comment on these discussions. While ETFs pegged to the spot prices of cryptocurrencies like Ripple, Polkadot, Dogecoin, and Trump-themed coins are still awaiting rulings from the SEC, issuers expect the next batch of cryptocurrency products to be tied to Solana, the sixth-largest cryptocurrency globally. Issuers indicate that this may not materialize until after the SEC releases the second part of its guidance, pushing the listing date to early fall. Some asset management companies have not waited for this. Last week, REX Financial and Osprey Funds adopted a more indirect and complex strategy to launch the first U.S.-traded cryptocurrency ETF that allows investors to invest in Solana - REX-Osprey Sol + Staking ETF. Unlike the six spot Solana ETFs awaiting approval, this fund invests in an entity that simultaneously holds Solana and a non-U.S. Solana fund. This structure allows REX Financial to bypass regulations governing commodity funds and surpass other issuers while offering investors a way to earn returns through cryptocurrency "staking." During staking, cryptocurrency holders voluntarily participate in transaction validation on the blockchain, checking if the ledger is all in sync. In return, validators either obtain a portion of transaction fees or receive newly issued cryptocurrency. Greg King, CEO of REX Financial, said, "We do believe the SEC is taking significant steps in dealing with cryptocurrency, but it still is the SEC, and not everything has been formally put in place." King admitted that he is seeking to gain a competitive advantage in the upcoming race for new Solana product shares. This new exchange-traded fund raised $12 million on its first day of listing.