Crypto leaders and TradFi bigwigs are pushing the SEC to rewrite its ETF rules—and allow all manner of altcoin and meme coin-related products to flood Wall Street.
During a closed-door meeting with the SEC’s new crypto task force on Friday, representatives of several digital assets-involved firms—including Coinbase, Andreessen Horowitz, and the financial services giant Fidelity—pressed the regulator to overhaul its ETF policies, according to publicly filed meeting notes.
The companies, all members of the Crypto Council for Innovation, an industry lobbying group, have asked the SEC to expand its current ETF-related standards. At the moment, only crypto assets traded in markets regulated by the SEC or CFTC—such as Bitcoin and Ethereum—are eligible to be traded on Wall Street via ETFs.
But should the powerful firms that met with the SEC last week get their wish, that could soon change. Those companies have now asked the agency to expand the concept of a regulated market to include a “range of existing crypto trading platforms.”
That minor shift in language could have seismic implications. Effectively, crypto and Wall Street’s top players are now asking for any crypto asset traded on, say, Coinbase, to be automatically fast-tracked for ETF approval.
That’s a much, much lower bar than the one currently governing the ETF market. If Coinbase and Fidelity get their way, then you could soon see not only spot Solana, XRP, and Dogecoin ETFs proliferating on Wall Street—as we've seen pile up in recent months—but Peanut the Squirrel and Gigachad-related products, too.
The memo submitted Friday on the subject acknowledged that such a change could usher in “a new wave” of crypto ETFs for retail traders. It would also, effectively, integrate the volatile meme coin sector with the traditional American economy.
On Friday, the Crypto Council for Innovation further requested that the SEC allow ETF issuers to directly purchase and sell crypto, participate in staking digital assets, and earn staking rewards. Currently, crypto ETF issuers like Fidelity and BlackRock do not custody the BTC and ETH tied to their products, nor do they generate valuable yield from staking that ETH.
A day prior to the Crypto Council for Innovation’s meeting with the SEC, Fidelity also met one-on-one with the agency’s crypto task force.
During that conversation, the two parties reportedly discussed standardizing rules for listing crypto ETFs, and clarity surrounding the ability for ETF issuers to collect staking rewards.
At Friday’s larger meeting, the companies present made several additional requests, including that the SEC should declare crypto products like stablecoins and NFTs to not be securities, and crypto offerings like airdrops to be outside the agency’s purview.
Edited by Andrew Hayward