The US Securities and Exchange Commission has opened public comment on a proposal requiring 85% of crypto ETF assets to meet existing eligibility standards. The rule could reshape how commodity-based crypto exchange-traded products are structured and approved.
NYSE Arca submitted the proposal to amend its listing framework for Commodity-Based Trust Shares. Under the plan, at least 85% of a fund’s net asset value must consist of assets already permitted under current rules, while up to 15% may include non-qualifying holdings.
Will The 85% Rule Expand Crypto ETF Design Flexibility?
The proposal allows broader portfolio construction while maintaining a core exposure to assets that meet surveillance-linked criteria. It also introduces a shift in how derivatives are measured, using aggregate gross notional value instead of market value.
Examples in the filing show practical implications. A diversified trust holding bitcoin, ether, Solana, and XRP would qualify if 95% of its net asset value meets standards, while a structure relying heavily on derivatives could fail if only 71% qualifies.
The SEC said the change aims to balance innovation with oversight, as exchanges seek more flexible product designs. The proposal also excludes non-fungible assets and collectibles from the definition of eligible commodities under the generic framework.
Still, the filing reflects a broader regulatory shift under SEC Chair Paul Atkins. The agency has increasingly emphasized standardized rules and clearer product architecture, alongside coordination with the Commodity Futures Trading Commission on digital asset guidance.
The next catalyst will be the outcome of the public comment period, which will determine whether the SEC advances a more flexible but rules-based framework for future crypto ETF listings.
