The US Securities and Exchange Commission (SEC) has revealed that spot crypto ETFs would come under its examination priorities next year. The Divisions of Examinations of SEC underlined its focus areas for 2025 which included distributed ledger systems, blockchain technology and cryptocurrencies.
Marking a stark change from last year, the SEC will examine Ethereum (ETH) and Bitcoin (BTC) exchange-traded products. The US regulator will concentrate on crypto services offering, trading, or providing tokenized advice on digital assets. The examination will also involve checking practices related to the technological risks of blockchain. This comes at a time when the crypto market is rife with security and volatility debate.
The decision to include spot crypto ETFs in its 2025 examinations is a major step for the SEC which approved the first spot BTC ETFs earlier this year, making way for Ethereum ETFs. As digital assets become an integral part of mainstream finance and even politics as we see from the recent developments like Ripple CEO Chris Larsen donating $10 million XRPs to Harris campaign, it has become paramount for the regulator to monitor the market.
SEC plans to assess the security protocols of blockchain technology along with their potential to damage crypto investors. The regulator will also concentrate on enforcing federal regulations on crypto market participants The agency wants to provide a detailed and clear regulatory oversight that encourages capital formation and protects investors and for that, it will be assessing how crypto companies tackle complex blockchain-related issues.
The regulator is not deterred by its legal hassles with crypto exchanges like Coinbase and Ripple as it gears up to take on crypto ETFs next. But unlike other years, the 2025 plan doesn’t want to suggest any changes on how to enforce the rules set by the SEC. The examinations will be a more compliant enforcement tool.
However, the outcome of the US elections will affect the SEC as its leadership and direction change. The two Presidential Elections candidates, Kamala Harris and Donald Trump have divergent views on crypto regulations. While Trump is more pro-crypto, Harris is more inclined to regulate the market. The former US President is a favourite of the crypto industry but Harris has also gained somewhat support courtesy of the new promises she has made.
At present, both sides are trying to show that they favour a crypto policy change by drawing in the support of industry leaders like Chris Larsen of Ripple. While Harris got a $10 million donation from Ripple’s founder, Trump has bagged $7.5 million in crypto donations from various sources. Based on how the US election goes and if Trump wins as per the forecast then the current SEC chairman Gary Gensler could be ousted, making way for another big name amidst a probable shift in policy.
Gensler has been criticised for his approach towards crypto regulations which resulted in SEC’s enforcement actions against crypto firms. However, the regular has repeatedly said that it acts to protect investors from potential risks.