TL;DR
- Grayscale, a16z and CCI urged the SEC to preserve existing classifications and avoid blanket restrictions for novel ETFs and exchange-traded products.
- a16z wants product-specific reviews, coordinated registration and listing processes, and predictable timelines, while Grayscale and CCI support optional confidential pre-filing discussions.
- The groups broadly oppose sweeping changes, but disagree on ETF terminology, with a16z favoring a legal-definition approach and Grayscale emphasizing economic characteristics across different product structures for investors.
Grayscale, Andreessen Horowitz and the Crypto Council for Innovation are urging the U.S. Securities and Exchange Commission to preserve existing fund classifications as it considers rules for a new generation of exchange-traded products. Their letters, dated August 31, arrived near the end of a 60-day consultation on so-called novel ETFs. The shared concern is that a broad regulatory category could impose unnecessary restrictions on products whose risks differ substantially. All three opposed classification changes that could automatically push products holding non-securities into the Investment Company Act framework simply because regulators consider them novel. That distinction could shape future digital-asset product applications significantly.
Industry Pushes For Product-Specific Reviews Instead Of Blanket Rules
Andreessen Horowitz argued that crypto-based ETPs now benefit from more mature market infrastructure, including exchange-approved listing standards and established disclosure requirements. It therefore asked the SEC to evaluate products according to their underlying characteristics, coordinate fund-registration and exchange-listing reviews, and use more predictable timelines. Its central argument is that crypto ETPs should not be grouped automatically with private-asset funds or unrelated strategies merely because both are considered unconventional. Grayscale similarly warned against imposing new portfolio conditions or disclosure regimes on digital-asset products that already operate with established compliance and reporting practices.
Grayscale and CCI also supported optional confidential pre-filing processes, which could allow issuers to resolve questions with regulators before formal applications become public. CCI additionally called for comparable regulatory efficiencies across ETFs and non-ETF ETPs while preserving existing investor protections. The broader industry position favors faster and clearer review procedures without dismantling the regulatory distinctions that already govern different product structures. The letters broadly resisted categorical changes that could increase requirements or delay launches, although the groups did not agree on every question involving terminology, classification and approval mechanics.
One disagreement centers on the ETF label itself. Andreessen Horowitz proposed reserving the term ETF for funds regulated under the Investment Company Act of 1940, while Grayscale argued that ETF should describe economic characteristics regardless of legal wrapper. CCI instead favored clearer disclosure of registration status rather than a major redesign of the current framework. The debate shows that the industry is aligned against blanket restrictions even while disagreeing over how labels should map onto legal structures. The SEC must now weigh those competing recommendations as it decides whether existing rules are sufficient for increasingly varied exchange-traded products.
