Franklin Templeton Seeks SEC Approval for New Crypto Index ETF

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The world of cryptocurrency investment is on the brink of a major evolution as Franklin Templeton, a global asset management giant, moves closer to launching its Franklin Crypto Index ETF. The firm has filed an amended S-1 registration with the U.S. Securities and Exchange Commission (SEC), signaling its intent to expand the fund’s scope over time—potentially opening the door to a broader range of digital assets.

This strategic move positions Franklin Templeton at the forefront of institutional crypto adoption, building on its early success with single-asset ETFs and aiming to deliver diversified exposure to digital assets in a regulated, compliant framework.

Initial Focus on Bitcoin and Ethereum

According to the updated filing submitted on Thursday, the Franklin Crypto Index ETF will initially track Bitcoin (BTC) and Ethereum (ETH), with a weighted allocation of 86.31% to Bitcoin and 13.69% to Ethereum. This split reflects the market dominance and regulatory clarity currently associated with these two leading cryptocurrencies.

While the fund does not guarantee future inclusions, the language in the filing leaves room for expansion. It states:

“It is uncertain whether any digital assets other than Bitcoin and Ethereum may in the future be added to the Underlying Index.”

However, it also clarifies that additions could be made if they meet strict regulatory criteria—particularly if the SEC has previously approved or permitted an exchange-traded product for a given token.

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Regulatory Compliance as a Gatekeeper

A key component of the fund’s design is its adherence to global capital markets regulations. The filing emphasizes that only digital assets deemed compliant with major financial jurisdictions—including the United States—will be considered for inclusion.

Franklin Templeton explicitly notes that a prerequisite for adding any new cryptocurrency will be prior SEC approval of an ETP or ETF for that asset. This creates a clear, rules-based pathway for future expansion while maintaining alignment with regulatory expectations.

This cautious yet forward-looking approach underscores the firm’s strategy: innovation within compliance. By tying new inclusions to existing regulatory milestones, Franklin Templeton reduces uncertainty and strengthens its case for SEC approval.

Building on Previous Success

Franklin Templeton is no newcomer to crypto ETFs. The company already manages the Franklin Bitcoin ETF (EZBC), one of the first spot Bitcoin ETFs approved by the SEC in January 2024. As of now, EZBC holds over $743.7 million in assets, reflecting strong investor confidence.

Additionally, its Franklin Ethereum ETF (EZET) has reached $33.9 million in assets under management, demonstrating growing appetite for regulated Ethereum exposure.

With this track record, the firm is well-positioned to extend its leadership into multi-asset crypto products.

A Potential Game-Changer for Institutional Investors

If approved, the Franklin Crypto Index ETF would list on the Cboe BZX Exchange, joining a growing suite of regulated crypto investment vehicles. Analysts believe this could mark a pivotal moment for both institutional and retail investors.

Jeff Hancock, CEO and co-founder of Coinpass, told Decrypt:

“The approval of a multi-asset crypto ETF could lay out the next phase for institutional and everyday investors seeking exposure to digital assets, without being correlated to one specific asset.”

He describes multi-currency ETFs as an “inevitability” and suggests their approval would bring “much-needed liquidity” to the market, while offering institutions greater flexibility in portfolio allocation.

Precedent Already Set: Fast-Tracked Approvals Signal Shift

Notably, Franklin Templeton had already received accelerated approval from the SEC for an earlier version of this fund—when it was structured solely around Bitcoin and Ethereum.

In a December 19, 2024 release, the SEC granted fast-track status to Franklin’s application, which would have expedited listing procedures. A similar fast-tracking occurred at the end of January for Bitwise’s Bitcoin and Ethereum ETF, which remains under S-1 review.

Hashdex’s Nasdaq Crypto Index US ETF—also focused on BTC and ETH—is following a comparable path, indicating a broader regulatory openness to diversified crypto funds.

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Broader Market Momentum Behind Multi-Asset Crypto ETFs

The momentum extends beyond just BTC and ETH. In recent months, investment firms have ramped up filings for ETFs tied to other major cryptocurrencies:

These developments reflect growing confidence in the regulatory environment—and much of that optimism stems from political shifts.

Regulatory Outlook: A New Era Under Paul Atkins?

Following Donald Trump’s November election victory, his nomination of Paul Atkins as SEC chair has sparked significant optimism across the crypto industry. Atkins, known for his pro-innovation and market-friendly stance, previously served as an SEC commissioner and is widely viewed as far more supportive of blockchain technology than his predecessor, Gary Gensler.

Glen Goodman, cryptocurrency analyst and author, believes this leadership change could dramatically accelerate approvals:

“Paul Atkins [...] is about as pro-crypto as the industry could hope for. When he takes over, the shift from Gensler's SEC to Atkins' SEC will be like night and day.”

While Atkins has not yet assumed office, the mere prospect of his appointment has emboldened asset managers to pursue more ambitious crypto product offerings.

Frequently Asked Questions (FAQ)

Q: What is the Franklin Crypto Index ETF?
A: It’s a proposed exchange-traded fund that would provide diversified exposure to major cryptocurrencies, starting with Bitcoin and Ethereum. It may include additional tokens in the future if they meet regulatory standards.

Q: Will the ETF include altcoins beyond Bitcoin and Ethereum?
A: Not immediately. The fund starts with BTC and ETH. Future additions depend on SEC approval of related exchange-traded products for those assets.

Q: Why is this ETF significant?
A: It represents a step toward mainstream, regulated access to multiple cryptocurrencies through a single investment vehicle—ideal for both retail and institutional investors.

Q: How does Franklin Templeton ensure regulatory compliance?
A: Only digital assets recognized as securities or commodities under major financial regulations—and previously approved by the SEC in another ETP—will be eligible for inclusion.

Q: When might the ETF launch?
A: There’s no confirmed timeline yet. The amended S-1 is under SEC review, and approval could come faster if regulatory sentiment continues to shift positively.

Q: How does this compare to other crypto ETFs?
A: Unlike single-asset ETFs (like those tracking only Bitcoin), this fund offers built-in diversification. It follows similar models from Bitwise and Hashdex but with potential for future expansion.

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Final Thoughts

Franklin Templeton’s push for a flexible, multi-asset crypto ETF reflects a maturing digital asset ecosystem—one where innovation aligns with regulation. By anchoring its strategy in compliance and institutional-grade oversight, the firm is helping pave the way for broader adoption.

As regulatory winds shift and investor demand grows, products like the Franklin Crypto Index ETF could soon become standard tools in diversified portfolios. Whether you're an individual investor or part of a large institution, staying informed about these developments is key to navigating the future of finance.

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