Important points:
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The SEC has introduced new post-closure guidelines explaining how registration statements containing applications for virtual currency ETFs may proceed pursuant to Sections 8(a) and 461 of the Securities Act.
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The General Listing Standards, approved in September 2025, eliminate the need for separate 19(b) approval for eligible virtual currency ETPs.
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The government shutdown created a backlog of more than 900 applications, forcing issuers to rely on the automatic 20-day mechanism under Section 8(a).
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The new SEC instructions will allow issuers to choose between automatic effectiveness or requesting accelerated effectiveness for expedited issuance under Rule 461.
After years of slow progress and periodic regulatory halts, the U.S. Securities and Exchange Commission has announced new guidelines that could shorten the approval timeline for crypto exchange traded funds (ETFs).
These updates come as a record-long government shutdown halted progress on more than 900 pending registration applications across financial markets. With the resumption of federal business, the SEC has issued technical guidance outlining how issuers can proceed with ETF applications under Sections 8(a) and 461 of the Securities Act of 1933.
This article explains what has changed, why it is important, and how the updated procedures will shorten the timeline for the launch of new crypto ETFs in the United States.
Regulatory freeze: Looking back
For most of 2025, ETF issuers, especially those focused on cryptocurrencies, were already dealing with significant procedural burdens. Following the approval of the Spot Bitcoin ETF in January 2024 and the Ether ETF in May 2024, there has been a surge in application activity from companies seeking to list products that track altcoins such as Solana (SOL), XRP (XRP), Chainlink (LINK), and Dogecoin (DOGE).
The regulatory process for many of these products still required separate review under Section 19(b) of the Securities Exchange Act of 1934. This means issuers rely on the SEC to issue proposed rule changes, open public comment periods, and issue approval or denial orders. The timelines were very different.
Path to generic drug listing standards
On September 17, 2025, the SEC approved general listing standards for commodity-based trust shares on Nasdaq, Chicago Board Options Exchange BZX Exchange, and New York Stock Exchange Arca. This changes the regulatory process by eliminating the need for separate Section 19(b) rule change approvals for all covered crypto ETFs.
The new standards were announced alongside the approval of the Grayscale Digital Large Cap Fund, the first multi-crypto asset ETF to hold Bitcoin (BTC), Ether (ETH) and other coins.
This streamlining eliminated a long-standing bottleneck that had previously held up product development, but the government shutdown immediately halted launch efforts.
Shutdown backlog
More than 900 applications were submitted during the 43-day closure but could not be processed. ETF issuers had no review mechanism, no communication with staff, and were left with no way to proceed with pending applications.
In this environment of regulatory paralysis, the only path forward for some issuers was to use an existing mechanism: the automatic 20-day expiry provision under Section 8(a) of the Securities Act of 1933. This allowed registration statements filed without a delay provision to automatically become effective after 20 days if the SEC did not take action or object. This mechanism helped launch several funds, including Canary Capital’s Spot XRP ETF.
This crisis and reliance on technological workarounds has highlighted the need for a more efficient and formal review process.
This approach was directly referenced in SEC guidance issued after resumption of operations. Once the SEC reopened, staff were directed to resume operations promptly and in an orderly manner. Publishers immediately asked for clarification on how applications submitted during the closure will be ordered and amended.
What does the SEC’s new guidelines actually change?
On November 13, 2025, the SEC issued a series of detailed technical instructions explaining how it will handle the backlog for the shutdown period.
The SEC’s new guidance applied to issuers such as Bitwise that have pending XRP ETF applications but have not yet completed the Section 8(a) process.
Post-shutdown guidance has created two primary mechanisms for transitioning stopped applications toward startup.
20 days automatic validity
As a remedy for filings filed during the shutdown, the guidance confirmed that registration statements filed without deferral will automatically become effective after 20 days under Section 8(a). The SEC also clarified that its staff will not recommend enforcement actions even if a filing does not include Rule 430A information.
Request acceleration with fixes
For issuers who desire a more expedited approval schedule or a return to active regulatory oversight, the SEC guidance clarifies that they can add an amendment deferral and then formally request acceleration under Rule 461. This allows issuers to seek accelerated effectiveness beyond the automatic 20-day countdown. The SEC also said the division will review filings in the order they are received.
Did you know? The general listing criteria only applies to exchange-traded products (ETPs) that hold underlying products, such as digital assets, that are traded on ISG member exchanges or that are subject to regulated futures markets with appropriate shared oversight.
What this means for future crypto ETF issuers
The SEC’s guidance does not guarantee faster approval for all crypto ETFs. The substantive legal review remains unchanged. What has changed is the friction in the process. The automatic activation mechanism under Section 8(a) plays a larger role, as applications filed without delay provisions during the shutdown may become effective after the standard 20-day period unless the SEC intervenes.
Rule 461 allows issuers to request that the SEC accelerate the effective date of their registration statements by a specified time. To do this, issuers must first amend their filings back to standard delinquent status and then file a formal Rule 461 request with the SEC. This request is not just a formality. This serves as confirmation that the issuer, underwriter, and advisor are fully aware of and accept their legal and anti-fraud responsibilities under securities laws.
By combining Rule 461’s expedited requests with a new general listing standard that avoids old Section 19(b) delays, issuers have streamlined the entire process. This combination makes the path to a compliant altcoin ETP faster and more predictable, allowing administrators to more reliably target specific launch windows.
Why speed doesn’t mean safety
Although the SEC has sped up the timing of approvals, it also emphasized that core investor protection rules have not been relaxed.
The main takeaway for issuers is that expedited approval does not reduce liability. The SEC’s post-closure guidance clarifies that the liability and anti-fraud provisions of the federal securities laws continue to apply to all registration statements, including those that are automatically effective under Section 8(a).
This is supported by Sections 11 and 12(a)(2), the core of the Securities Act of 1933. These regulations impose strict liability under Section 11 and strict liability standards under Section 12(a)(2) for material misstatements or omissions in registration documents. Simply put, if a prospectus is misleading, the issuer is liable and investors do not have to prove that the company acted negligently or intentionally.
The burden of ensuring accuracy falls on ETF providers, who must conduct thorough internal checks and due diligence to meet this high standard, especially when timelines are compressed.
