Crypto firms urge SEC to avoid blanket ETF rules, Better Markets pushes back

Grayscale Investments, a16z, and the Crypto Council for Innovation urged the SEC not to expand the Investment Company Act to cover funds whose principal holdings are non-securities, advocating instead for evaluating novel ETFs on a product-by-product basis. The three groups argued that crypto assets, leverage, private investments, and event contracts present different risks and should not be treated as a single category. They also pushed for optional confidential pre-filing procedures and closer coordination between fund registration and exchange-listing reviews to speed legitimate innovations. The letters emphasized maintaining existing classification rules and avoiding blanket regulatory changes that would sweep non-securities funds into the Investment Company Act framework. Separately, Better Markets criticized novel ETFs designed for gambling-like uses, arguing they should not享 be regulated as typical ETFs because they lack an investment, hedging, or economic function. Overall, industry voices support tailored, risk-based scrutiny and clearer, more predictable regulatory timelines rather than broad, one-size-fits-all rules for novel ETF products.