a16z, Grayscale Urge SEC to Avoid Blanket Limits on New ETF Products

a16z, Grayscale, and the Crypto Council for Innovation urged the U.S. Securities and Exchange Commission to avoid blanket restrictions on so-called new exchange-traded funds and instead assess products based on their individual risk profiles. According to ChainCatcher, the three comment letters were submitted on August 31 as the SEC’s 60-day public comment window on new ETF regulation neared its end. The SEC opened the consultation on June 30, seeking views on whether existing rules are sufficient, how such funds should be regulated, and whether the registration process needs to be adjusted. a16z said crypto-based ETPs now benefit from more mature market infrastructure, including exchange-approved listing standards and established disclosure requirements, and should not be grouped with products holding private assets or using other novel strategies. Grayscale argued that digital asset products with established compliance and disclosure records should not face new portfolio conditions or disclosure regimes simply because they are labeled new. The Crypto Council for Innovation called for comparable regulatory efficiency between ETF and non-ETF ETPs while preserving existing investor protections. The groups broadly opposed category-based regulatory changes that could add requirements or delay product launches, but they differed on classification, approval procedures, and terminology. The dispute over the ETF label was especially clear, with a16z proposing that the term be reserved for funds under the 1940 Investment Company Act, while Grayscale said ETF should describe economic characteristics rather than legal wrappers.