Canary Capital’s proposed spot Litecoin ETF is now in regulatory limbo after the U.S. Securities and Exchange Commission (SEC) failed to take action on its Thursday deadline.
Key Takeaways:
- The SEC missed its deadline on Canary’s spot Litecoin ETF, leaving the application in limbo.
- The agency is phasing out 19b-4 filings in favor of S-1s, adding confusion to ETF approval timelines.
- A possible government shutdown and shifting rules are delaying decisions on several altcoin ETF applications.
The silence has added confusion to an already murky situation, as the crypto industry grapples with shifting ETF application procedures and the looming impact of a federal government shutdown.
SEC Shifts Crypto ETF Filings Toward S-1, Phases Out 19b-4 Process
Earlier this year, the SEC urged firms to withdraw their 19b-4 filings, the documents used for exchange rule changes, in favor of relying solely on S-1 registration statements.
Canary complied, pulling its 19b-4 on September 25.
Bloomberg ETF analyst James Seyffart and FOX reporter Eleanor Terrett noted that the traditional deadline tied to 19b-4 filings may now be irrelevant under the SEC’s evolving framework.
But the regulatory uncertainty doesn’t end there. A shutdown of the federal government is complicating matters further.
Although the SEC said it will continue limited operations during the shutdown, a contingency plan published in August stated it would halt the review and approval of new financial products. That includes registration statements and ETF filings.
Whether the agency’s silence on Canary’s Litecoin ETF stems from the withdrawn filing or the shutdown remains unclear. The SEC has not provided public comment on the delay.
Canary’s stalled application joins a growing list of altcoin-based ETF proposals seeking to expand the U.S. crypto ETF market.
Alongside Litecoin, other filings include products based on Solana, XRP, Avalanche, Cardano, Chainlink, and Dogecoin.
These would join the already launched Bitcoin and Ethereum spot ETFs, which have collectively drawn over $74 billion in inflows.
Despite the standstill, analysts remain optimistic. Bloomberg’s Eric Balchunas said this week that the SEC’s adoption of new listing standards under Rule 6c-11 may accelerate approvals.
SEC Chair Paul Atkins added that these changes will streamline the process and lower barriers for investors.
Solana ETF Filings Signal Institutional Momentum
Last week, several top asset managers, including Fidelity, Franklin Templeton, and Bitwise, have submitted updated S-1 filings for spot Solana ETFs, some with staking features.
ETF analyst Nate Geraci expects the US SEC could approve them by mid-October, calling it a pivotal month for digital asset products.
The filings follow the recent launch of the REX-Osprey Solana Staking ETF on the Cboe BZX Exchange, which drew $12 million in first-day inflows.
Analysts say Solana is quickly becoming the next altcoin favored by institutions, with strong inflows also reported in Europe-based Solana ETPs.
Geraci and others believe the inclusion of staking language in these filings could pave the way for long-awaited spot Ethereum ETFs with staking capabilities.
Meanwhile, Bitcoin exchange-traded products now hold over 1.47 million BTC, representing around 7% of the total supply, with U.S.-based ETFs dominating the landscape.
BlackRock’s IBIT leads with 746,810 BTC, followed by Fidelity’s FBTC at nearly 199,500 BTC, according to data from HODL15Capital.
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