The recent guidance from the Securities and Exchange Commission (SEC) has significantly opened the door for a surge in investments related to cryptocurrencies, including Solana, Ripple’s XRP, and possibly even Donald Trump’s memecoin, according to experts from Fortune.
Under the leadership of new SEC chairman Paul Atkins, appointed by Trump, the SEC has released guidance that offers clearer instructions for asset managers on how to secure approval for exchange-traded products (ETPs) associated with cryptocurrencies. This development paves the way for a larger flow of investments into cryptocurrencies like Solana and Ripple’s XRP.
“The floodgates are essentially wide open for new introductions,” Andy Martinez, CEO of Crypto Insights Group, stated. This digital asset data provider connects institutions with fund managers and anticipates an influx of capital into cryptocurrency investment products.
The guidance issued on July 1 represents an implicit “nod of approval” towards crypto ETP applications by a more crypto-friendly Republican-led SEC, marking a departure from the more restrictive approach of the former SEC chair, Gary Gensler, who faced substantial criticism regarding his management of the cryptocurrency sector.
This January, the SEC established a new crypto task force aimed at formulating a regulatory framework just days after Trump launched his memecoin, $TRUMP. With the latest guidance, asset management companies now have a clearer understanding of how to structure their ETF applications, encouraging a new wave of submissions.
Martinez pointed out that the SEC currently has a “very large backlog” of ETFs linked to various crypto assets awaiting approval, a situation likely to worsen with the new guidance, even as it intends to speed up the approval process significantly.
The guidance also emphasizes improved transparency. It requires asset managers to articulate descriptions of crypto assets and their trading platforms in “plain English” and encourages them to disclose potential conflicts of interest. This mirrors existing disclosure requirements for registered assets but necessitates additional “crypto-specific” details due to the complexities involved with non-traditional assets.
