REX-Osprey filed prospectuses for 21 crypto funds and Defiance lodged six more products on Oct. 3.
Seyffart noted that “3x isn’t really allowed by the new leveraged ETP rules,” and that the issuer appears to be “targeting” 3x via options to exceed the standard 2x cap.
The rules were designed to streamline spot crypto listings by removing 19b-4 approvals and shifting the bottleneck to the effectiveness of S-1 filings.
On Sept. 29, he wrote that altcoin ETF approvals are “really 100% now,” given generic standards render the old 19b-4 “clock” moot and leave S-1s awaiting Corp Fin’s green light.
For the moment, that green light is red. With the US government shut down, the SEC is operating with limited staff and is not reviewing or declaring registration statements effective.
According to Balchunas, “everything is on ice… it’s like a rain delay,” suggesting issuers will queue until the agency reopens.
Nevertheless, the current delays do not change the regulatory structure set to streamline ETF approvals once operations resume.
The Oct. 3 filings highlighted how generic standards have shifted the competitive focus from winning one-off rule changes to racing S-1s through Corp Fin.
