Grayscale, a16z and CCI File Three Letters Urging Individual Bitcoin (BTC) ETF Reviews

Three Letters, One Message to the SEC

Grayscale Investments, venture firm Andreessen Horowitz (a16z) and the Crypto Council for Innovation (CCI) have filed separate comment letters pressing the US Securities and Exchange Commission (SEC) not to fold novel crypto ETF structures into a single restricted category. The three letters, dated Aug. 31 and posted to the SEC docket as the comment window closed, argue that products tied to crypto assets, private investments, leverage and event contracts carry distinct risks and should be assessed individually by underlying asset, liquidity and market structure. The consultation, opened June 30 under file number S7-2026-24, ran for 60 days and asked whether existing rules suffice for funds using new assets or strategies — including blockchain-enabled products built on layer-1 networks. All three signatories opposed any change that would automatically sweep products holding non-securities into the Investment Company Act framework.

a16z Seeks Predictable Timelines

The a16z letter is the most process-oriented of the three. It makes four core requests: preserve the current investment-company definition, better coordinate fund-registration and exchange-listing reviews, publish predictable review calendars for comparable products, and run some procedural steps concurrently. The firm's position rests on how far crypto market infrastructure has matured — exchange-approved listing standards, established disclosure obligations and functioning arbitrage channels now exist, so digital-asset products should not be grouped with funds holding illiquid private securities or running highly leveraged strategies, it argues. In its submission, the firm contends that a single wrapper for all novel strategies would impose fresh compliance costs on products already operating under developed oversight, without delivering matching investor-protection gains.

The 1940 Act's 40% Test

The legal crux is the Investment Company Act of 1940. Under its objective test, an issuer qualifies as an investment company if investment securities exceed 40% of its total unconsolidated assets, excluding government securities and cash; a separate subjective test examines an issuer's activities, public representations, management and income sources. The SEC explicitly asked whether a product investing mainly in non-securities could still qualify. Spot crypto vehicles typically use commodity-based trust structures rather than registering as open-end funds — the agency itself has called the spot Bitcoin products approved in January 2024 exchange-traded products, not ETFs. Grayscale, a16z and CCI all opposed rewriting these established tests, warning that the change could capture commodity trusts and crypto products structured outside the Act entirely.

ETF Label Splits the Industry

On terminology, the industry splits. a16z proposed reserving the ETF label for open-end funds registered under the 1940 Act, with other products marketed as ETPs so investors can see the legal distinction. Grayscale pushed back: in its reading the term describes economic function — exchange trading, transparent pricing, arbitrage mechanisms — rather than a legal wrapper, and functionally equivalent products should not be barred from the name. CCI took a middle path, urging clearer registration-status disclosures instead of redefining labels, so investors learn which regime governs each product while familiar market vocabulary survives. Grayscale also opposed new portfolio conditions or disclosure regimes triggered solely because a product is characterized as “novel,” arguing that long-standing compliance records should continue to count in the SEC's evaluation.

Faster, Quieter Review Paths

All three letters converge on process speed. Grayscale and CCI backed an optional confidential prefiling process that would let issuers surface legal or disclosure issues with SEC staff before public registration — without extending statutory review periods. The timing is not academic: since the SEC adopted generic listing standards for commodity-based trust shares in September 2025, qualifying spot crypto funds can reach the market without a product-specific exchange rule change, cutting review timelines from as long as 240 days to roughly 75 days. The stakes are visible in the figures the SEC itself cites — US ETF assets grew from more than $4 trillion in 2019 to over $12 trillion by the end of 2025. Grayscale's recent withdrawal of three proposed altcoin products, whose registrations never became effective, underscores the cost of stalled processes. Readers tracking the market in real time can follow live spot and futures prices on Gate.

No Rule Yet on the Table

Our reading of the primary document matters here: the filing we are looking at is a request for information, not a proposed rule — it prohibits no product, sets no compliance date and binds no issuer today. SEC Chair Paul Atkins framed the review around a “consistent, transparent and efficient regulatory framework” when opening it. The agency can now issue guidance, propose amendments — which would require another public comment round before becoming binding — adjust staff procedures, or take no action at all; no response date has been announced. With Ethereum (ETH) and Bitcoin products trading as mainstream institutional offerings in the US, the outcome will be watched closely across Bitcoin maximalism circles and issuer legal teams alike — but until the SEC chooses a path, the practical effect on existing spot crypto listings is zero.