Grayscale, Andreessen Horowitz (a16z) and the Crypto Council for Innovation urged the US Securities and Exchange Commission not to impose blanket restrictions on so-called novel exchange-traded funds, arguing that products should be assessed on their own risk parameters instead.
The three comment letters were dated Aug. 31 and posted by the SEC around the close of the agency’s 60-day public-comment period on novel ETFs. The consultation began on June 30, when the regulator asked whether existing rules are adequate, how the next generation of ETFs should be regulated and whether the registration process needs to change.
Shared opposition to broad restrictions
Across their submissions, the groups said the SEC should not place all novel exchange-traded products into a single bucket or attach new requirements simply because they are described as novel. They broadly opposed regulatory changes that could add conditions, create fresh disclosure regimes or delay launches for products that differ materially from one another.
All three also pushed back against changing existing investment-company classifications in ways that could automatically sweep products holding non-securities into the Investment Company Act framework.
a16z calls for product-by-product review
a16z said novel products should be reviewed according to their underlying characteristics. The firm also asked the SEC to coordinate fund-registration reviews with exchange-listing reviews and to adopt more predictable timelines.
It argued that crypto-based exchange-traded products now operate with more developed market infrastructure, including exchange-approved listing standards and established disclosure requirements. On that basis, a16z said these products should not be grouped with vehicles that hold private assets or rely on other novel strategies.
a16z also proposed that the term ETF be reserved for funds governed by the Investment Company Act of 1940.
Grayscale backs optional confidential pre-filing
Grayscale supported an optional confidential pre-filing process, a position also backed by CCI. The asset manager argued that digital asset products with established compliance and disclosure records should not face new portfolio conditions or disclosure rules solely because they are characterized as novel.
On terminology, Grayscale took a different view from a16z. It said the label ETF should describe a product’s economic characteristics, regardless of its legal wrapper.
CCI focuses on disclosure clarity and process efficiency
CCI said the SEC should preserve existing investor protections while creating comparable regulatory efficiencies across ETFs and non-ETF ETPs. Rather than overhauling the current approval structure, the group urged the regulator to provide clearer disclosures about registration status.
Differences remain on labels and process design
While the three commenters aligned against categorical restrictions, their recommendations diverged on classification, approval procedures and terminology. The clearest split came over the ETF label: a16z tied it to the 1940 Act framework, Grayscale tied it to economic features, and CCI emphasized better disclosure over a major rewrite of the approval system.
Taken together, the letters asked the SEC for a clearer and faster path for reviewing novel exchange-traded products without forcing fundamentally different structures into a single regulatory category.