CME announces SOL futures; its first new crypto market in 4 years
SEC exits almost all major crypto legal actions; Ripple eyed
Franklin, Bitwise, Hashdex begin U.S. crypto portfolio era

Retreat

The much anticipated rethink of crypto market and asset oversight appears to be well underway, though geopolitical uncertainty means optimism on the outlook for the asset class hasn't been enough to support prices.

The cadence of developments in the regulatory sphere seemed to quicken after the establishment of the Crypto Task Force in January, led by the Commission's longest-standing digital asset proponent, Hester Peirce.

We covered several such points in the piece linked below.

SEC edges closer to key approvals - CFB

CFBKen Odeluga

Since then, if anything, indications have proliferated.

Further down in this edition, we tally the SEC'S recent string of legal capitulations, as further evidence of a change in its overarching regulatory stance.

Franklin, Bitwise, Hashdex launch crypto ETF portfolio era

First, it’s worth noting the backdrop of this evolving regulatory picture is the steady roll of Bitcoin and Ether-based ETFs that continue to see a smooth path to market. We’re pleased to report these include three funds from existing clients. Just as important, they're among the first ever U.S.-listed crypto portfolios, albeit, for now, they only invest in the two largest digital assets, Bitcoin and Ether.

Franklin's EZPZ path to BTC & ETH

The Franklin Crypto ETF (EZPZ) is among the first to become available for trade, with a listing on Cboe BZX. It’s structured to initially represent the capitalization weights of Bitcoin and Ether, according to our CF Institutional Digital Asset Index - US - Settlement Price (IDAX, Bloomberg: CFIDAX).

Still, as Franklin’s Head of Digital Assets, Roger Bayston, and Head of ETF Product and Capital Markets, David Mann make clear in our latest CFB Talks Digital Assets episode, Bitcoin and Ether are just the beginning for EZPZ. Other assets will be added in synch with their addition to IDAX. As the IDAX web page indicates, additional assets will enter the portfolio as they're “recognized as being in conformance with major financial jurisdictions prevailing capital markets”.

Click below to hear all the EZPZ details, Franklin’s potential future crypto plans, plus the team's deep insights on a range of digital asset themes.

CFB Talks Digital Assets Episode 39: Bitcoin and Ether made EZPZ with Franklin’s Roger Bayston and David Mann - CFB

CFBKen Odeluga

Bitwise speeds toward joint ETF

The SEC later issued an order granting accelerated approval for Bitwise’s Bitcoin and Ethereum ETP on NYSE Arca. It will be the firm’s third U.S. exchange listed crypto fund to come to market. At the time of writing, the Commission had yet to separately greenlight the fund’s registration statement (S-1) though after a form 19b-4 approval, that’s a near certainty.

Bitwise already offers Bitwise Bitcoin ETF (BITB), the NAV of which is calculated from our CME CF Bitcoin Reference Rate – New York Variant (BRRNY). Meanwhile, the NAV of Bitwise Ethereum ETF (ETHW) is determined from our CME CF Ether Dollar Reference Rate – New York Variant (ETHUSD_NY). The group has opted to calculate BTC and Ether portfolio value, and ultimately NAV, from the same indices.

Hashdex launches its first U.S. crypto ETF

The Bitwise news follows the launch of another fund offering joint Bitcoin and Ethereum exposure, and the first U.S.-listed crypto ETF by another high-profile digital assets-focused issuer. The Hashdex Nasdaq Crypto Index US ETF (NCIQ) began trading on February 14th. It tracks Nasdaq‘s BTC and ETH portfolio, Nasdaq Crypto US™ Index (NCIUS); a part of the Nasdaq Crypto Index Family, for which CF Benchmarks is Calculation Agent.

BlackRock opens Swiss crypto outpost

U.S. crypto fund issuers are continuing to expand overseas too.

BlackRock hasn't commented on its recent incorporation of iShares Digital Assets AG in Zurich, reported by Reuters. But a Switzerland-domiciled entity could be the group's first move in a plan to eventually enter Europe's well-developed, though relatively small, in capitalization terms, crypto ETP market.

Meanwhile BlackRock's circa $58bn AuM iShares Bitcoin Trust ETF (IBIT), listed on Nasdaq, tracks our CME CF Bitcoin Reference Rate - New York Variant (BRRNY), bringing BRRNY assets under reference to about 60% of the U.S. BTC ETF total. A new iShares BTC ETP tracking BRRNY's European-hours variant, BRR, could enjoy favourable market structural conditions.

Elsewhere, Hashdex, maintains its largely overlooked crypto pioneer status. It's on track to list the world's first spot XRP ETF, following approval last month from Brazil’s securities regulator CVM. (More details in the piece below.)

Hashdex set to launch world’s first XRP ETF - CFB

CFBKen Odeluga

SEC's Big Legal Retreat vs. Crypto

The SEC has agreed in principle to dismiss its lawsuit against @krakenfx.

It’s a massive win for crypto, the United States of America, and the world. Since our inception, Kraken has operated with integrity and dedication to doing the right thing.

Regulation by enforcement has…
— Dave Ripley (@DavidLRipley) March 3, 2025

Kraken CEO Dave Ripley's tweet in response to the SEC dropping its lawsuit

Backtracking

As mentioned, the SEC has been busy on the legal front in recent weeks, though in retrograde fashion. After a several years-long barrage of investigations and enforcements against crypto firms, the Commission has been busily backtracking on dozens of the cases. In fact by our reckoning, the SEC has in one way or another exited or paused almost all major crypto enforcement actions or investigations.

Here, we attempt to tally all SEC exits from crypto investigations and enforcement actions so far this year.

They're summarized below. We include the SEC's ongoing appeal vs. Ripple Labs, as that now seems to be proceeding in name only; as we explain later.

Major SEC crypto enforcements or investigations ended, or paused, this year

Only one or two case relate directly to investment products. But a trend change in the Commission's crypto stance has obvious read-across to its underlying tenets on a range of positions regarding crypto ETFs.

Kraken, Coinbase Gemini off the hook

The latest instance came this week, with the SEC agreeing in principle to drop its lawsuit against Kraken. Echoing details of the Commission’s exit from cases against Coinbase, and Gemini, Kraken said it is not required to admit wrongdoing, pay a fine, or make any changes to its business practices. All three of the above are CME CF Constituent Exchanges, though SEC actions have obviously been way broader.

Robinhood’s statement towards the end of last month that the SEC ended its investigation into Robinhood Crypto “with no action”, should also be included.

Binance pause

Meanwhile, the SEC's two-year lawsuit against Binance took a different turn. The Commission and the largest offshore U.S. exchange filed a joint motion for a 60-day pause; apparently at the behest of the agency, which argued in a statement the work of its Crypto Task Force “may impact and facilitate the potential resolution of this case.”

This looks like the same model the SEC applied to its civil fraud case against Tron founder, Justin Sun, and the Tron Foundation. Sun and the Commission agreed to submit a status report following negotiations that will take place during a 60-day stay.

We've argued the SEC vs. Binance pause may have implications for other live SEC cases, including its complaint against Ripple Labs. This former SEC official appears to agree.

As does former SEC Enforcement Division chief, John Reed Stark, in a rather colourful LinkedIn post. His view is that for any remaining crypto enforcement actions, it's a matter of when, not if:

"My guess is that all SEC crypto-related investigations have already been secretly "paused" and that SEC crypto-enforcement resources have already been shifted to other priorities."

The SEC is currently an appellant in its dispute with Ripple, after a court fined the XRP issuer just $125 million, and ruled sales of the token only partially violated securities regulations. A pause could have far-reaching effects: the case overhangs several high-profile ETF filings, as well as ambitious plans by Ripple itself.

DeFi win

It's not just centralized exchange operators. Uniswap Labs, which initially warned it faced unregistered securities complaints around a year ago, called the SEC's signal of an end to the probe a “huge win for DeFi”.

OpenSea also said at the end of last month the agency verged on closing its investigation, after the NFT platform revealed a Wells Notice last August. MetaMask developer Consensys, announced similar late last month as well.

Elsewhere, the Commission dropped an appeal against a ruling favouring the Blockchain Association and Crypto Freedom Alliance of Texas, on the ‘dealer definition’ rule change. The rule change had threatened to widen the definition to untenable levels. A federal judge had concluded in November: “the SEC exceeded its statutory authority".

Staking discussed

Adjacently, Bloomberg ETF analyst James Seyffart noted a memo to Crypto Task Force chair Peirce, ahead of a meeting where “the ability to include staking as a feature in exchange traded products” would be discussed.

The SEC's crypto task force is getting in the weeds & asking questions about staking. Honestly these conversations should have happened years ago but this is a good start. Great catch @TreeNewsFeed https://t.co/kpYjMadYtO pic.twitter.com/YBIugeO1ZC
— James Seyffart (@JSeyff) February 14, 2025

The SEC ruled out staking ahead of the launch of Ether ETFs last year, so this fact-finding initiative is another sign an anticipated shift is underway.

Ironically, despite signs of a trend change in the Commission's views, the absence of overarching statements or policy frameworks on exchange traded crypto products, for now, means a degree of uncertainty remains. Still, any residual doubts on how bona fide the regulatory reset will be, ought to be dispelled.

CME SOL futures launch could quicken ETF approvals

In a move that’s likely to be as impactful as the arrival of Bitcoin and, eventually, Ether futures, CME Group is set to launch trading in derivatives of a third cryptocurrency for the first time.

Pending regulatory approval, SOL futures will be available to trade from March 17th, around four years after CME last added a crypto asset to its marketplace, with ETH futures.

Like all CME crypto derivatives, CME SOL futures will settle to a regulated CF Benchmarks Reference Rate; the CME CF Solana-Dollar Reference Rate (SOLUSD_RR).

This launch could have an impact as positive and almost as far reaching as the leading derivative venue's entrance into the digital asset market around 8 years ago, with Bitcoin futures.

First, there are the typical market structural benefits from the addition of a CFTC-regulated tool for risk management and strategic trading, levelling up Solana facilities, just as the addition of CME BTC and ETH derivatives did, for Bitcoin and Ether.

CME SOL and SOL ETFs

The batch of active filings for spot Solana ETFs parked at the SEC could benefit too.

Under what we've termed the SEC's 'old doctrine' (basically, the Commission's 'stealth' conditions for crypto ETF approval) the existence of CFTC-regulated Designated Contract Markets, i.e. CME crypto derivatives, and a Designated Clearing Organisation - CME Clearing - helped establish BTC and ETH as commodities. This enabled a regulatory framework for issuance of crypto ETF stock as commodity trust shares.

We've also long thought the 'old doctrine' would lapse in line with a regulatory reset - like the one going on now. We expected this would take time though. At a minimum, we thought new rules would need to be established before a crypto ETF could be approved, without the existence of a CFTC-regulated "market of significant size", to quote the phrase often used by the SEC when rejecting crypto ETF filings in years past.

Well, clearly the Commission has recently been moving in the direction of new rulemaking. For Solana, though, perhaps the process has been favourably short-circuited. The existence of CME SOL futures will mean almost all market structural facilities present when Bitcoin and Ether ETF applications were approved will also be present for the six proposed Solana ETFs.

Incidentally, as the table below shows, most active SOL ETF filings parked at the SEC cite our SOLUSD_RR as benchmark.

Active Solana ETF filings

That's not to suggest use of SOLUSD_RR in an ETF is essential for regulatory reasons. It's historically been the availability of regulatory look-through from the existence of a regulated futures market that's been important to the SEC. With CME SOL futures, the SEC will have that for SOL ETFs, whether it will continue to insist on it in future for other crypto ETFs, or not.

Meanwhile, for issuers who will utilize SOLUSD_RR as their SOL benchmark, additional visibility and efficiency will be available, similar to BTC and ETH counterparties using our benchmarks for those ETFs.

With APs, MMs, and other ETF participants coordinating around the same Reference Rate, and its streaming spot variant, CME CF Solana-Dollar Real Time Index (SOLUSD_RTI), and potentially transacting CME SOL futures that also settle to SOLUSD_RR (while generally tracking SOLUSD_RTI by default) potential additional efficiencies for SOLUSD_RR-based ETFs are obvious.