Grayscale and a16z Urge SEC Against Blanket Bitcoin (BTC) Novel ETF Rules

The SEC’s Novel ETF Docket

Oversight of exchange-traded funds built on novel structures belongs to the U.S. Securities and Exchange Commission (SEC), and on August 31 the crypto industry placed its formal answer on the agency’s record. The submissions landed in the closing stretch of a 60-day public comment period the SEC opened on June 30 for its “Novel ETFs” initiative — the agency’s shorthand for listed funds whose features depart from established product templates and raise first-of-their-kind supervisory questions. Three filings anchor the industry side of that docket: Grayscale, the asset manager best known for its Bitcoin (BTC) trust products; venture capital firm Andreessen Horowitz, widely known as a16z; and the Crypto Council for Innovation (CCI), a policy advocacy group. All three press a single core position: the SEC should not impose one comprehensive regulatory frame on novel ETFs, and should instead evaluate each product against its own risk characteristics. The point is not academic, because the funds at issue are heterogeneous by design — some hold baskets of digital assets whose tokens function as governance tokens or as infrastructure for appchains, while others track assets whose security status, as the long-running debate around the security-status dispute over XRP shows, remains contested. A rule calibrated to the riskiest member of that set, the commenters argue, would misclassify the rest and chill product design in the process. The Grayscale letter and the a16z submission, both docketed in the SEC’s rule file S7-2026-24, frame the request in procedural as much as substantive terms: give issuers a review path whose timing and requirements they can predict, and the pipeline for crypto exchange-traded products can scale without the Commission diluting its oversight. The filings close the comment window; what the agency does with them — guidance, rule amendments, or neither — is now the live question.

a16z supplies the most granular case. In its filing, the venture firm argues that crypto-linked exchange-traded products already operate under exchange listing standards and disclosure requirements adequate for investor protection, and that folding them into the same regulatory frame as funds holding private assets would add compliance weight without any corresponding benefit. Its proposed fix is procedural: run the fund’s registration process and the exchange’s listing review in parallel, and adopt a more predictable review schedule, so sponsors know when a product can reach the market rather than waiting through serial, sequential approvals. The payoff, on the firm’s reading, is listing acceleration — the more foreseeable the timeline, the faster crypto ETPs come to U.S. exchanges. Grayscale and CCI take up a different mechanism — a confidential pre-filing procedure that would let sponsors test a concept with the Commission before going public with it. Both back the measure as a deterrent to copycat applications, the wave of duplicative filings that inevitably follows any template the SEC has already blessed. Beneath those mechanisms sits the shared doctrinal line all three letters defend: opposition to any classification change that would automatically pull products holding primarily non-securities into the Investment Company Act of 1940’s comprehensive frame. That statute governs registered investment companies, and its disclosure, custody and diversification requirements were drafted for pooled securities vehicles — not for funds whose underlying assets are commodities or commodities-adjacent tokens, where product economics are driven by tokenomics and asset design rather than by portfolio-management law. On the “ETF” label itself, the record splits. a16z argues the designation should be reserved for vehicles subject to the 1940 Act; Grayscale counters that eligibility should turn on economic substance rather than legal form. That disagreement — between an issuer defending its own structure and a framework question only the Commission can settle — marks precisely where one body’s position ends and the other’s begins. Readers tracking the market in real time can follow live spot and futures prices on Binance.

Guidance or Rulemaking Next

These are comment-stage submissions, not final rules — no effective date binds anyone yet, and the letters bind no entity until the Commission acts. What they fix are the terms of the next step: the SEC is expected to weigh guidance or rule amendments on novel ETFs in light of the record, and any resulting text would bind fund sponsors and the exchanges listing the products. The stakes reach beyond the U.S. — Japan anticipates spot crypto ETF approvals around 2028 under the revised Financial Instruments and Exchange Act enacted in July 2026, so a predictable American review standard would hand regulators elsewhere a reference point to measure against.