The Securities and Exchange Commission has issued its firstcomprehensive guidanceon the crypto ETF approval process, potentially clearing a path for dozens of cryptocurrency exchange-traded funds that have been waiting months or years for regulatory approval.
While the 12-page framework establishes clearer disclosure requirements, it stops short of guaranteeing approvals and maintains the SEC’s traditionally cautious stance on digital asset investment products.
For investors and crypto companies, this represents incremental progress rather than a regulatory breakthrough—but it could still accelerate the timeline for new crypto ETF launches from major cryptocurrencies like Solana to niche tokens.
What changed with the new SEC guidance?
On July 1, 2025, the SEC’s Division of Corporation Finance released a comprehensive 12-page statement outlining disclosure requirements for crypto asset exchange-traded products (ETPs). This guidance represents the first part of what industry insiders describe as a complete overhaul of the regulatory framework governing cryptocurrency investment products.
The document outlines how issuers must structure their filings when seeking approval for crypto ETFs, requiring clear explanations in “plain English” of all factors that make these products distinctive from traditional ETFs.
According to the guidance, issuers must address custody arrangements, risk factors, and the operational challenges of cryptocurrency markets—though the guidance itself doesn’t guarantee any approvals will follow.
Key requirements for crypto ETF issuers
The SEC guidance establishes several critical disclosure requirements that could significantly impact the crypto ETF approval process:
Trust structure and assets: Issuers must provide detailed information about underlying crypto assets, including their associated networks, consensus mechanisms, supply characteristics, and any events that might affect supply, like halving events or protocol modifications.
Custody and security:The guidance requires extensive disclosure about private key storage policies, including whether assets are held in cold, warm, or hot storage, and whether crypto assets are commingled with other customers’ holdings.
Service providers and fees:Companies must identify authorized participants (APs), describe counterparty arrangements, and detail all fee structures, including how sponsor fees are calculated and which expenses are covered.
Risk factors:The SEC emphasizes the need for comprehensive risk disclosure covering price volatility, cybersecurity threats, network attacks, fraud risks, and competition from other products.
The bigger picture: Streamlining the process
While the current guidance focuses on disclosure requirements, industry participants anticipate more significant changes ahead, according to a report by Reuters. Sources familiar with the discussions told Reuters that the SEC is working on a second piece of guidance that could dramatically accelerate the crypto ETF approval process.
The proposed changes would replace the current system requiring exchanges to submit individual 19(b)4 forms for each new crypto product—a process that can take up to 240 days—with a general listing template that could reduce approval times to just 75 days.
“The SEC is looking for a general rule it can apply to all listings, and currently is going back and forth on precise wording with the exchanges,” said a senior executive at one issuer, who expects exchanges to submit this general filing within “days or weeks.”
Industry response and market impact
The guidance has received measured responses from industry participants.
Matt Hougan, chief investment officer of Bitwise Asset Management, which has more than half a dozen crypto ETFs awaiting SEC approval, toldReuters: “The most interesting and important thing about this guidance is that it exists. It suggests that the SEC acknowledges that crypto ETPs are becoming part of the mainstream.”
However, the guidance represents disclosure requirements rather than approval criteria, leaving questions about whether meeting these standards will result in ETF approvals.
Sui Chung, CEO of crypto index provider CF Benchmarks, described the development to Reuters as addressing the “explosion” in ETF applications currently awaiting regulatory approval.
What’s next: Solana and beyond
While dozens of crypto ETF applications covering various cryptocurrencies remain pending, industry sources expect the next wave of approvals to focus on Solana, the world’s sixth-largest cryptocurrency. However, these launches likely won’t occur until after the SEC releases its second guidance document, potentially pushing launch dates into early autumn.
Some asset managers aren’t waiting for the streamlined process. REX Financial and Osprey Funds recently launched the first US ETF offering Solana exposure through an indirect structure that bypasses current commodity fund rules. The REX-Osprey Sol + Staking ETF pulled in $12 million on its first trading day.
Greg King, CEO of REX Financial, acknowledged the strategy: “We do think the SEC is taking big steps forward in dealing with cryptocurrency, but it’s still the SEC, and not everything has been codified yet,” he toldReuters.
Broader regulatory shift
The guidance represents part of a notable shift in the SEC’s approach to cryptocurrency regulation under Republican leadership. The agency has established a task force to draft new regulations, refocused its crypto enforcement team, and paused or abandoned several high-profile enforcement cases.
This change comes after years of industry criticism regarding regulatory uncertainty and what many perceived as an antagonistic stance toward digital assets. The new guidance suggests a more structured approach aimed at creating clear rules, though significant regulatory challenges remain unresolved.
Looking forward
The SEC’s new framework for the crypto ETF approval process represents a procedural step forward in cryptocurrency regulation. By providing clearer disclosure requirements and potentially streamlining approval timelines, the regulator appears to be responding to the growing demand for crypto investment products while maintaining its emphasis on investor protection standards.
However, substantial challenges remain. The cryptocurrency market’s inherent volatility, custody complexities, and evolving regulatory landscape continue to present risks that traditional ETF structures weren’t designed to address.
The effectiveness of this new approach will depend on whether clear disclosure requirements translate into actual approvals and whether the promised streamlined process can efficiently handle the dozens of applications currently pending.
As the SEC continues developing its comprehensive crypto ETF framework, market participants will be watching closely to see how quickly the promised streamlined process materializes and whether it can effectively manage the dozens of applications currently in the pipeline.
(Photo by Patrick Tomasso)
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