SEC Fast-Tracks Crypto ETFs, UK FCA Relaxes Rules, and FTX to Distribute $1.6 Billion (#225 – 21 Sept 2025)

Sponsored by Deribit

1. SEC Approves New Exchange Listing Standards Fast-Tracking Crypto ETF Listings

The U.S. Securities and Exchange Commission approved new listing standards for crypto ETFs.

Under current rules, exchanges must file a 19b-4 form for crypto ETFs, triggering a review period of up to 240 days.

The new listing standards will reduce that timeline to as little as 75 days and allow the listing and trading of crypto ETPs that meet those standards without the 19b-4 form requirement.

This matters as there are dozens of crypto ETFs currently awaiting approval, and we should expect these to list soon, enabling investors to gain access to a range of altcoins via ETFs.

This is positive for the altcoin ecosystem as it will make it easier for investors to gain access to such assets.

This is also positive for the broader advisory sector as it enables financial advisors to offer more diversified opportunities compared to only offering Bitcoin ETFs as is the case now.

This will further catalyse the entry of institutional players as it gives hedge funds plenty of opportunities to run various trading strategies on these new instruments over the coming months and years.

[NEWSLETTER CONTINUES BELOW]

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Disclaimer: Virtual Assets may lose their value in full or in part, and are subject to extreme volatility

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2. UK Regulator Proposes Relaxing Rules for Crypto Firms

The UK FCA has published a consultation on new minimum standards designed to allow fast-growing crypto firms to compete internationally.

In short, the FCA is proposing to apply the majority of existing rules and guidance in the FCA Handbook to crypto firms in the same way as they do for traditional finance firms, in line with the “same risk, same regulatory outcome” approach.

This makes sense and arguably should have been the approach from the start instead of taking an anti-crypto stance.

There are also practical reasons behind this.

The UK has arguably lost its opportunity to play a leading role not only in the crypto-native space (with most players choosing jurisdictions like the UAE for their global operations) but also in crypto-linked traditional finance (with most of the activity taking place in the U.S., from DATs to IPOs).

The question now is whether these proposed changes can reverse this trend.

Another question is whether this announcement, coming at the same time as the visit of President Trump to the UK, is a pure coincidence.

Time will tell.

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My Latest Podcast Episode

What do VARA applicants need to know about the Dubai crypto regulations? My interview with Sean McHugh, Head of Market Assurance at Dubai's Crypto Regulator, VARA.

The full interview is available on my YouTube page and podcast channels:

YouTube: http://bit.ly/3K9qM8W

Spotify: http://bit.ly/46rXtpD

Apple Podcast:http://bit.ly/4238Pz3

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3. FTX to Distribute Around $1.6 Billion to Creditors

FTX’s bankruptcy estate is set to release $1.6 billion to creditors at the end of the month, marking the third major payout following the crypto exchange's collapse nearly three years ago.

U.S. customer claims will receive 40% in the latest round, bringing their total recovery so far to 95%.

FTX international customers will receive an additional 6% payout, bringing cumulative distributions to 78%.

General unsecured and digital asset loan claims will receive a 24% payout, raising recoveries to 85%.

Convenience claims, defined as those under $50,000, will be paid out at 120%, exceeding the face value of what was owed.

The main reason liquidators can pay these amounts is that the assets held by FTX include mostly crypto, but the bankruptcy process requires the firm to pay the U.S. dollar equivalent of those assets at the time of insolvency to creditors.

Considering that Bitcoin was worth around $15,000 the week of the FTX collapse and now trades around $115,000, this gives significant leverage to the liquidators.

While this may sound like good news at first glance, the reality is that investors would have been much better off if they could directly receive their crypto instead of a U.S. dollar equivalent at the time of insolvency.

The biggest winners of this insolvency have been the lawyers, liquidators, and related service providers who have been charging millions of dollars in fees each year to FTX.

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Henri Arslanian

*Please note that this newsletter reflects Henri’s personal views and not those of any organisation he is involved with. This newsletter is for educational purposes only, and none of its content should be construed as investment or financial advice of any kind.