Crypto ETFs Back On Track: SEC Clears Shutdown Bottleneck

Key Insights:

• SEC allows automatic approval of certain ETF filings delayed by the recent government shutdown.
• Bitwise XRP ETF may advance as new guidance removes bottlenecks in the SEC review process.
• Issuers can now request faster ETF approvals by meeting updated post-shutdown SEC filing rules.

The U.S. Securities and Exchange Commission (SEC) has released new guidance that may allow crypto ETF issuers to move forward with their filings sooner than expected. The update follows a backlog caused by the recent government shutdown, during which more than 900 registration statements were submitted.

Bloomberg ETF analyst Eric Balchunas noted that this change could open the door for delayed crypto ETFs to advance. He said, “It looks like issuers can sort of speed up the effectiveness of filings in an effort to clear out some backlog,” and added, “Bitwise XRP is due next up I believe.”

SEC Clarifies Filing Process Post-Shutdown

While the SEC’s Division of Corporation Finance was offline during the shutdown, issuers were still allowed to submit filings. Now that the Division is back in operation, it has outlined how those filings will be handled.

Registration statements filed without delaying amendments will automatically become effective after 20 days under Section 8(a) of the Securities Act. Issuers do not need to amend these filings if the proper language was used at the time. This gives some applicants a clearer path to launch without waiting for direct staff action.

Acceleration May Be Allowed

The SEC has also stated that issuers can request an earlier effective date if certain conditions are met. If a delaying amendment is added before the end of the 20-day period, the staff will consider requests under Rule 461.

This option may be useful for issuers who didn’t follow the automatic process during the shutdown. Balchunas suggested that some of these ETF filings could now “try and push out as soon as they can.”

Bitwise XRP ETF Mentioned as Next in Line

According to Balchunas, Bitwise’s XRP ETF could be one of the next funds to move forward. Although no official timeline has been confirmed, the updated process could reduce delays if issuers act quickly and follow the outlined procedures.

The SEC also reminded issuers to contact their assigned office if they prefer to delay their filing’s effectiveness or need to provide updates.