Updated August 19, 2025: SEC Delays Decision on Truth Social, Solana, and XRP Crypto ETFs
The U.S. Securities and Exchange Commission (SEC) has delayed its decision on three highly anticipated cryptocurrency exchange-traded funds (ETFs), extending the review deadlines to October.
In a notice submitted on August 18, the SEC set new decision dates of October 8 for NYSE Arca’s “Truth Social Bitcoin and Ethereum ETF”; October 16 for the Solana ETF from 21Shares and Bitwise; and October 19 for the 21Shares Core XRP Trust.
The “Truth Social Bitcoin and Ethereum ETF,” submitted on June 24, is structured as a commodity-based trust that directly holds Bitcoin (BTC $116,032) and Ethereum (ETH $4,299), issuing shares backed by these assets. Although the fund is branded under U.S. President Trump’s Truth Social platform, its operation is similar to existing spot Bitcoin and Ethereum ETFs on the market.
Cboe BZX is also seeking approval for the first U.S. spot Solana ETF through applications from 21Shares and Bitwise. These products will directly hold Solana tokens, providing investors with a secure way to participate in Solana’s price performance.
Another independent application from 21Shares aims to launch the “Core XRP Trust,” which holds XRP and tracks its market value. This trust was initially submitted in February and subsequently revised, with its 180-day review period originally set to expire this Wednesday. However, the SEC has decided to grant itself an additional 60 days for review.
SOL and XRP Lead the Queue for Listing
The U.S. crypto ETF market is seeing regulatory “green lights,” which may herald a new wave of listing excitement. On one hand, the SEC has officially approved the physical subscription and redemption mechanisms for crypto ETFs, significantly enhancing trading efficiency and market liquidity. On the other hand, universal crypto ETP listing standards are emerging, opening a fast track for crypto assets into the ETF market.
SEC Officially Approves Physical Redemption for Crypto ETPs
Crypto regulation is undergoing a significant turning point. On July 30, the SEC cast a crucial vote allowing authorized participants to conduct physical subscriptions and redemptions for crypto ETPs.
Both crypto ETPs and ETFs are financial instruments that list crypto assets (such as Bitcoin and Ethereum) in a securitized form on traditional stock exchanges, aiming to provide investors with a convenient and compliant investment channel for crypto assets.
Both allow investors to trade like stocks without direct interaction with crypto wallets or private key management, offering high liquidity and transparency, and requiring approval from the relevant financial regulatory authorities in their respective countries or regions.
However, there are significant differences in structure and regulation between the two. Crypto ETFs belong to a fund structure, typically being physically backed products with stricter disclosure requirements and higher asset security, making them harder to approve in more tightly regulated markets (like the U.S.); crypto ETPs, on the other hand, represent a broader concept and may not necessarily be funds, potentially carrying issuer credit risk but are easier to launch and more flexible in markets like Europe.
As is well known, the spot ETFs for Bitcoin and Ethereum use a cash redemption mechanism. In this model, authorized participants must first deliver cash to the ETF issuer, which then purchases an equivalent amount of Bitcoin or Ethereum on the spot market to support the newly issued ETF shares; the reverse operation is performed during redemption.
However, this indirect operation model leads to high trading costs, delayed settlements, and significant market slippage risks, limiting product attractiveness and primary market liquidity.
With the opening of the physical redemption mechanism, authorized participants can now directly deliver Bitcoin or Ethereum to the ETF issuer to establish or redeem ETF shares. The further connection between on-chain assets and traditional financial products not only enhances operational efficiency but also opens up new channels for compliant liquidity of crypto assets, potentially attracting more ETF participants.
“This marks the beginning of a new chapter in SEC regulation. As a key goal during my tenure as ###, I am committed to developing a regulatory framework for the crypto market that aligns with market realities. This approval will reduce product costs, enhance operational efficiency, and ultimately benefit investors. It will further promote the construction of a rational and clear crypto regulatory system,” stated SEC ### Paul S. Atkins.
Bloomberg analyst James Seyffart believes that the physical subscription/redemption mechanism for Bitcoin and spot Ethereum ETFs has been approved. It is expected that upcoming approvals for altcoin ETFs will also likely allow physical redemptions from the outset. This is another step in the right direction.
Additionally, the SEC has also approved other proposals that facilitate the development of the crypto asset market, including the listing trading applications for mixed spot Bitcoin and Ethereum ETPs, specific Bitcoin spot ETP options trading, flexible exchange (FLEX) options trading, and raising the position limit for specific Bitcoin ETP options to 250,000 contracts, enriching market tools and enhancing flexibility.
Streamlining Listing Channels, Universal Standards for Crypto ETPs Expected Within 60 Days
In addition to making a crucial step in the operational model of crypto ETPs, their listing channels have also seen significant optimization.
Recently, Cboe BZX submitted a milestone rule amendment proposal to the U.S. SEC. The core of this proposal is to systematically amend Rule 14.11(e)(4) to establish universal listing standards for commodity-based trust shares (CBTS).
As early as 2013, BZX established a listing system for CBTS under Rule 14.11(e), but the rule was essentially designed for traditional commodity ETFs, primarily targeting trust structures supported by single commodities (like gold or oil). With market evolution, such as the rise of crypto assets and the emergence of composite investment portfolios, the original rule’s drawbacks have gradually become apparent, including limited asset types, cumbersome approval processes, and low innovation efficiency.
The Bitcoin and Ethereum spot ETFs are a typical case, having undergone years of modifications and negotiations before finally being approved. In fact, under existing rules, each crypto ETF is required to submit a separate 19b-4 application document, with the approval cycle potentially lasting up to 240 days. This model consumes regulatory resources and undermines market confidence.
The logic of the new proposal is to institutionalize and standardize the ETF listing process of “one coin, one review,” allowing any CBTS product that meets specific conditions to be listed directly.
This revision comprehensively upgrades the definition of CBTS and breaks through the previous limitations of single commodities. The new regulation clarifies that trust shares can be issued by trusts, limited liability companies, or other similar entities, significantly enhancing flexibility. The asset range is also allowed to hold multiple commodities (such as gold, oil, Bitcoin, Ethereum, etc.), commodity-based assets (including futures, options, swaps, etc.), securities, cash, and cash equivalents (such as U.S. government bonds and certificates of deposit).
At the same time, the proposal clarifies three paths for directly listing underlying assets: (1) ISG market trading: commodities traded on markets of members of the Intermarket Surveillance Group (ISG), where exchanges can access trading information, ensuring regulatory visibility; (2) DCM (Coinbase Derivatives Exchange) trading for 6 months: futures contracts based on the commodity continuously traded for at least 6 months on designated contract markets (such as CME) regulated by the CFTC, with monitoring agreements; (3) ETF net asset value accounting for 40%: the commodity accounts for more than 40% of the net asset value (NAV) in a listed ETF that is traded on a national securities exchange. These three paths effectively anchor the liquidity, compliance, and regulatory visibility of assets, forming a unified and transparent “listing equals admission” mechanism, avoiding redundant reviews and regulatory arbitrage.
Furthermore, the proposal also strengthens market transparency and investor protection requirements, stipulating that CBTS issuers must disclose the following core information daily for free on a public website, including daily holdings, NAV and market prices, historical data, and trading volume, greatly enhancing the readability and verifiability of ETF products, helping investors reasonably assess the fair value and trading efficiency of ETFs.
It is worth mentioning that the proposal supports crypto staking mechanisms. According to Rule 14.11(e)(4)(G), if the proportion of redeemable assets in the ETF falls below 85%, liquidity risk management policies and procedures must be established; if assets are staked, isolated, re-staked, restricted, or otherwise limited in liquidity, resulting in an inability to redeem T+1, it is considered “not redeemable at any time”; if staked assets exceed 15% of total assets, a specialized liquidity management mechanism must be activated. This means that as long as the ETF can ensure sufficient liquidity or establish a robust staking risk control system, staking mechanisms can be legally incorporated into the structure of crypto ETF products, providing more possibilities for product design and revenue models.
Currently, the proposal has not yet been formally finalized. According to Greg Xethalis, Chief Legal Officer at Multicoin Capital, this regulation still needs to undergo public comment and review, with the comment period likely ending within 21 days after publication in the Federal Register, meaning this rule may be finalized in less than 60 days. Once passed, it will open an efficient and transparent listing channel for commodity-type ETPs, including crypto assets.
New Rules on the Horizon: Who Are the Biggest Winners?
With universal listing standards for crypto ETPs on the verge of being introduced, Coinbase, the CFTC, and altcoin ETFs may become the biggest beneficiaries.
As mentioned earlier, under the new regulatory framework, as long as a certain asset’s futures have over six months of compliant trading records on Coinbase’s DCM contract market, it qualifies for universal listing. This means Coinbase may become the “certification center” for altcoins seeking entry into ETFs. Moreover, since the new proposal supports staking mechanisms, related institutions will also benefit, as Coinbase Custody is currently a recognized mainstream custodian and staking service provider in the U.S., handling custody for numerous Bitcoin and Ethereum spot ETFs.
The proposal clearly states that entities issuing CBTS products are not registered as investment companies under the Investment Company Act of 1940 but must accept the regulatory framework of the Commodity Futures Trading Commission (CFTC). This means that which crypto assets will enter ETFs will be controlled by the CFTC’s approval of their futures, indirectly impacting the eligibility of ETFs. The regulatory trend is clear: the SEC decides the product path for crypto ETFs, while the CFTC pre-screens asset qualifications.
Simultaneously, the new regulations will promote faster approvals for more altcoin ETF products. According to Bloomberg senior ETF analyst Eric Balchunas, based on the standards, cryptocurrencies with over six months of futures trading records on Coinbase’s derivatives exchange will be permitted to enter ETPs. Currently, more than a dozen crypto assets meet the conditions, aligning with earlier market expectations of an 85% approval probability for mainstream cryptocurrencies. Regarding the specific approval timeline, Balchunas indicated it could occur in September or October this year.
