21Shares Pursues Fast-Track Approval for Crypto Index ETFs

In a significant move within the cryptocurrency investment landscape, 21Shares, a leading provider of cryptocurrency investment products, has filed for two crypto index exchange-traded funds (ETFs) with the U.S. Securities and Exchange Commission (SEC) under the Investment Company Act of 1940. This strategic decision, announced on July 18, 2025, aims to expedite the approval process and facilitate quicker market entry for these innovative financial products.

The two proposed index ETFs are designed to track the top ten cryptocurrencies and the top ten programmable blockchains, respectively. The first fund, named the 21Shares FTSE Crypto 10 Index ETF, will encompass ten of the most prominent digital assets, while the second will focus on blockchains with real-world applications, extending beyond Bitcoin (BTC). According to Federico Brokate, Head of U.S. Business at 21Shares, these products will provide investors with diversified exposure to the rapidly evolving digital asset market, which has seen a surge in demand for accessible investment options.

This filing marks a notable shift in strategy for 21Shares, as the firm adopts the 1940 Act—a legislative framework that has gained traction among crypto asset managers seeking faster SEC approvals. Unlike the more traditional Securities Act of 1933, which typically entails a protracted review process, the 1940 Act has emerged as a viable alternative for firms eager to capitalize on the growing interest in crypto indices and ETFs. Market experts, including Nate Geraci, President of the ETF Store, have noted that the 1940 Act route allows issuers to avoid lengthy delays often associated with the SEC's evaluation of crypto ETF frameworks.

The urgency of 21Shares' application is underscored by the ongoing developments in the ETF market. Historically, several prominent issuers, including Grayscale and Bitwise, have faced significant delays in securing approvals for their crypto-related products under the 1933 Act. Grayscale's Digital Large Cap Fund conversion was recently approved, yet the SEC has placed a stay order on it pending the establishment of standardized guidelines for crypto ETFs. As of the latest updates, the SEC's deadline for crypto index filings for Bitwise and Grayscale was July 2025, with only Grayscale receiving preliminary approval, albeit with trading activities suspended.

The implications of 21Shares' filing are significant, suggesting a potential shift in how crypto investment products can be structured and marketed. While the SEC's response to this latest application remains to be seen, Bloomberg has reported a 95% likelihood of approval for index products, reflecting a growing acceptance of cryptocurrency as a legitimate asset class within traditional financial frameworks.

In summary, 21Shares' decision to pursue a faster approval route under the 1940 Act not only positions the firm to seize market opportunities but also highlights the evolving regulatory landscape for cryptocurrency investments. As demand for diversified and accessible crypto products continues to rise, the industry anticipates that the SEC's forthcoming decisions will shape the future of cryptocurrency ETFs and their role in investment portfolios.

This development underscores the ongoing tension between innovation in the digital asset space and regulatory oversight, as stakeholders await further clarity from the SEC on the framework governing crypto ETFs. The outcome of 21Shares' application could serve as a pivotal moment for the broader acceptance of cryptocurrency investment vehicles in mainstream finance.