The US SEC is moving to streamline how token-based exchange-traded products are brought to market, offering clearer guidance for issuers navigating a space long marked by regulatory ambiguity.
In a notice published on July 1, the SEC’s Division of Corporation Finance outlined what crypto ETF issuers must include in their filings.
The guidance covers everything from how net asset value is calculated and how service providers are selected, to detailed descriptions of custody practices and potential conflicts of interest.
SEC Framework Targets Clarity for Token-Based Funds
It applies specifically to spot and derivative-based crypto ETPs that are registered under the Securities Act of 1933 and the Exchange Act of 1934.
The move reflects the SEC’s evolving stance on crypto oversight. As token ETPs grow in popularity, particularly following strong inflows into spot Bitcoin ETFs, the regulator appears to be laying the groundwork for more structured disclosure norms across a wider range of digital assets.
Yes, this is what everyone wants, what makes sense and what we think will happen and why we so bullish (95% on most of the coins) approval. Q is what will the standards be. We think they'll likely be loose enough where the vast majority of Top 50 coins would be ok to be ETF-ized. https://t.co/1AUZOmpe1O
— Eric Balchunas (@EricBalchunas) July 1, 2025
Notably, the new disclosure standards come as the SEC and exchanges work together on a generic listing framework. This framework could allow certain token-based ETFs to bypass the traditional 19b-4 rule change process.
If adopted, it would mark a significant shift. Exchanges could reportedly list a qualifying crypto ETP after a 75-day review, reducing red tape and speeding up time to market.
Agency Urges Tailored Disclosures as ETF Market Expands
Further, the SEC stated that each issuer must tailor disclosures to its specific structure. However, it also flagged several key areas that will receive close scrutiny.
These areas include how underlying assets are selected and valued. In addition, the SEC will examine how custody and insurance are managed. It will also assess whether any affiliated entities create conflicts of interest.
Moreover, issuers must explain the mechanics of creation and redemption—especially during volatile or illiquid market conditions.
On the same day, the agency approved Grayscale’s request to convert its Digital Large Cap Fund into a spot ETF.
The fund, which holds a diversified basket of crypto tokens, will now trade on US exchanges, marking one of the first regulated multi-asset digital funds to do so.
So far, the market has welcomed single-asset Bitcoin ETFs. However, multi-token products like Grayscale’s are still relatively rare. Now, the SEC’s expanded guidance could change that. If issuers meet the detailed disclosure requirements, more such funds may enter the market.
Industry participants have long called for consistent treatment of crypto ETFs. Now, with this latest signal, the SEC seems ready to respond. It aims to bring more structure to the fast-evolving space. At the same time, it remains committed to protecting investors.
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