Guiding You Through the Complex World of Exchange-Traded Products
The approval of generic listing standards for spot crypto exchange-traded products (ETPs) by the U.S. Securities and Exchange Commission (SEC) in September 2025 has reshaped the digital asset investment market. For the first time, issuers can pursue spot Bitcoin, Ethereum, or diversified crypto index ETPs under a standardized framework — allowing these products to be listed and traded on major exchanges such as the NYSE and Nasdaq.
These products provide both institutional and retail investors with regulated, liquid exposure to digital assets, without the operational risks of directly holding private keys or managing custody. By bridging the gap between traditional finance and crypto markets, spot crypto ETPs are expected to accelerate mainstream adoption. Analysts project billions in inflows as the market expands, with the potential for more than 100 new offerings in the next 12 months.
But opportunity brings complexity. Issuers, asset managers, and exchanges face dual oversight from the SEC and the Commodity Futures Trading Commission (CFTC), alongside heightened scrutiny around custody, surveillance-sharing agreements, and investor protections. Navigating this regulatory maze requires experienced legal counsel with deep roots in both securities law and digital assets.
At Montague Law, we help clients seize these opportunities while mitigating the risks — delivering practical, proactive guidance at every stage of the ETP lifecycle.
What is an exchange traded product?
Key Characteristics
- Tracking Mechanism: ETPs typically aim to replicate the performance of their underlying benchmark, which could be a stock index, bond, commodity, currency, or even a basket of assets.
- Trading: They trade intra-day on exchanges, with prices fluctuating based on supply, demand, and the value of the underlying assets.
- Structure: ETPs are generally passively managed, though some may involve active strategies, and they often have lower expense ratios compared to mutual funds.
Common Types of ETPs
- Exchange-Traded Funds (ETFs): The most popular subtype, these are pooled investment funds that hold a diversified portfolio of assets and issue shares that trade on exchanges.
- Exchange-Traded Notes (ETNs): Unsecured debt securities issued by banks that promise to pay a return based on the performance of an index, without holding the actual assets.
- Exchange-Traded Commodities (ETCs): Similar to ETFs but focused on commodities like gold or oil, often backed by physical assets or futures contracts.
Example:
Our Crypto ETP Services
We provide comprehensive counsel for asset managers, exchanges, issuers, and investors in the crypto ETP space, including:
ETP Structuring & Launch
Guidance on SEC filings (e.g., Form S-1), registration statements, custody rules, and surveillance-sharing agreements.Regulatory Compliance & Audits
Ongoing advice to ensure adherence to SEC, CFTC, and exchange-level requirements, including anti-manipulation and investor protection rules.Risk Disclosures & Investor Protections
Drafting and reviewing prospectuses, disclosures, and compliance manuals to reduce exposure and protect stakeholders.Dispute Resolution & Litigation
Representation in matters involving tracking errors, valuation disputes, enforcement actions, or investor claims.Strategic Advisory
Helping funds, venture capital firms, and exchanges position themselves in a fast-evolving marketplace.
ETP Structuring & Launch
Bringing a spot crypto ETP to market is not a simple filing exercise — it is a multi-layered regulatory process that requires coordination with the SEC, listing exchanges, custodians, and market participants. Every step must be executed with precision to withstand regulatory scrutiny and instill investor confidence.
At Montague Law, we help clients design, structure, and launch ETPs that align with statutory obligations and evolving market practices. Our counsel bridges the gap between traditional securities regulation and the unique challenges of digital assets, ensuring issuers are positioned for both compliance and long-term growth.
SEC Filings and Disclosures
We draft and file Form S-1 registration statements and related disclosures, helping issuers present a complete and compliant picture to regulators and investors. Clear, accurate disclosures not only reduce legal exposure but also build trust with the marketplace.Custody and Safekeeping
Digital asset custody remains one of the most closely examined aspects of crypto financial products. We guide clients through safekeeping requirements, including accounting treatment under SEC Staff Accounting Bulletin No. 121, and coordinate with custodians to ensure secure and regulator-approved frameworks.Surveillance-Sharing Agreements
To mitigate market manipulation concerns, exchanges listing crypto ETPs are often required to enter into surveillance-sharing agreements. We assist issuers in structuring these arrangements, drawing from precedents established in the ETF markets to satisfy regulatory standards.
SEC Press Release 2025-121
By navigating these challenges with foresight and experience, Montague Law helps asset managers, exchanges, and issuers bring compliant, investor-ready products to market with confidence.
Regulatory Compliance & Audits
Compliance is not a one-time hurdle but an ongoing obligation. Spot crypto ETPs face sustained scrutiny from both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), with overlapping rules on securities, commodities, and derivatives. The regulatory environment is fluid, requiring continuous monitoring and proactive adjustments to remain aligned with expectations.
At Montague Law, we guide clients through this evolving landscape by:
Conducting compliance audits to identify gaps in disclosures, custody arrangements, or reporting practices
Advising on dual oversight by the SEC and CFTC, particularly in light of the CFTC’s Digital Assets Resource Page, which outlines its role in overseeing commodity-based crypto products
Monitoring exchange rules, including NYSE Arca and Nasdaq listing standards, to ensure products meet the requirements for approval and ongoing operation
Drafting compliance manuals and delivering tailored training for fund managers, compliance officers, and internal legal teams
We act as ongoing advisors, building long-term compliance frameworks that reduce the risk of enforcement actions, protect reputations, and foster investor trust.
In addition to ETP compliance, issuers and exchanges should also be aware of new legislation reshaping token markets. The Digital Asset Market CLARITY Act of 2025 introduces § 4(a)(8), a tailored exemption designed for digital asset offerings and secondary trading in the U.S. Our analysis of the CLARITY Act explains how this framework may complement spot crypto ETP strategies.
Risk Disclosures & Investor Protections
Investor trust is the foundation of any successful ETP. Clear, accurate, and comprehensive disclosures not only satisfy regulatory requirements but also help investors understand the unique risks of digital assets. Without transparency, even the most innovative product can lose credibility in the market.
Montague Law works with issuers to design disclosure frameworks that meet statutory requirements and address the realities of crypto markets. Our services include:
Drafting prospectuses in line with SEC Form 10-K–style risk factor disclosures, ensuring that material risks are presented in a way that is both complete and comprehensible to investors
Identifying and addressing risks specific to digital assets, including extreme price volatility, potential tracking errors, liquidity challenges, and vulnerabilities in digital asset custody arrangements
Advising on compliance with advertising and investor communication requirements under FINRA Rule 2210, helping marketing teams strike the right balance between accessibility and accuracy
Our role is to ensure investor-facing materials protect both issuers and investors, balancing transparency with competitive positioning. By developing disclosures that regulators recognize and investors trust, issuers can strengthen their reputation and reduce the likelihood of disputes or enforcement actions.
For additional context, the SEC’s Investor Bulletin on Exchange-Traded Funds provides insight into how regulators expect funds to communicate risk to the public.
Dispute Resolution & Litigation
Even with careful planning and robust compliance frameworks, disputes in the crypto ETP space are inevitable. Valuation challenges, tracking discrepancies, custody failures, or regulatory inquiries can trigger conflicts that threaten both capital and reputation. Swift, informed legal action is essential to protect issuer and investor interests.
Montague Law brings together deep experience in crypto litigation and securities enforcement defense to resolve disputes at every stage. Our team represents clients before regulators, in arbitration forums, and in federal courts, tailoring our strategy to the complexity of each matter.
We handle:
Defense against SEC enforcement actions and CFTC investigations, leveraging insights from the SEC’s Enforcement Division to anticipate regulatory priorities
Litigation arising from tracking errors, NAV misstatements, custody lapses, or operational breakdowns that can undermine investor confidence
Arbitration and mediation between fund managers, exchanges, custodians, and investors to resolve disputes efficiently and preserve business relationships
Representation in shareholder litigation or class actions tied to digital asset securities, where emerging case law intersects with traditional securities doctrines
By combining proactive defense with sector-specific expertise, Montague Law helps clients manage high-stakes disputes and safeguard their position in an increasingly scrutinized marketplace.
Strategic Advisory
The crypto ETP market is evolving rapidly, and success requires more than simply meeting compliance obligations. Asset managers, venture investors, and exchanges must anticipate market shifts, position their products competitively, and build partnerships that accelerate growth. Strategic foresight is as critical as legal accuracy.
Montague Law partners with clients to evaluate opportunities and craft strategies that align with both regulatory expectations and market realities. Our advisory services include:
Assessing market entry strategies in light of institutional inflows, using industry data and fund flow analysis to guide timing and positioning
Advising venture funds and exchanges on investment opportunities linked to the expanding crypto ETP ecosystem, from product launches to secondary market activity
Monitoring global regulatory harmonization, including developments under frameworks such as the EU’s Markets in Crypto-Assets (MiCA), which sets precedent for cross-border standards (European Commission MiCA Framework)
Connecting clients with trusted custodians, auditors, and service providers to ensure strong operational foundations and investor confidence
By combining legal counsel with strategic market insight, Montague Law helps clients stay ahead of competitors and capitalize on opportunities in one of the fastest-moving areas of global finance.
In Conclusion: Why Montague Law
The emergence of spot crypto ETPs marks a defining moment for digital asset markets. With opportunity comes complexity, and success depends on having legal counsel that understands both the innovation of blockchain and the structure of securities law.
Montague Law offers that balance. We bring venture capital insight, blockchain-native experience, and deep knowledge of securities regulation to help clients launch, protect, and grow their exchange-traded products. From structuring and filings to dispute resolution and strategic advisory, our approach is comprehensive and tailored to your goals.
As the regulatory environment continues to evolve, we remain focused on anticipating changes before they affect your business, delivering cost-effective solutions, and providing clear guidance every step of the way.
If you are preparing to enter the market for spot crypto ETPs, Montague Law is ready to be your partner in compliance, defense, and innovation.
Contact us to begin the conversation.
Let a Digital Assets Attorney Help
Do you have more questions about crypto and the law? Our team at Montague Law can provide you with the answers you want. You can easily contact one of our digital asset attorneys by calling us at 904-234-5653. Allow us to walk you through each step of this legal process.