The U.S. Securities and Exchange Commission (SEC) has remained silent regarding the Canary Litecoin ETF, as the initial deadline for a decision passed on Thursday, adding uncertainty to the crypto community. This silence comes amid a backdrop of a federal government shutdown and new generic listing standards, leaving the crypto community unsure of how the regulator will operate.
The SEC's silence has raised questions about the future of crypto ETF applications. Bloomberg ETF analyst James Seyffart and FOX News reporter Eleanor Terrett have suggested that the traditional 19b-4 deadlines for crypto ETF applications might no longer be relevant, as the SEC has requested applicants to withdraw them, leaving the S-1 registration statement as the primary document awaiting regulatory approval.
A significant layer of uncertainty is the government shutdown, which began on Wednesday. In August, the SEC released an "Operation Plan" stating that it would "not review and approve applications for registration" during a shutdown. This includes new financial products, changes to self-regulatory organization rules, and the review or acceleration of registration statement effectiveness. It remains unclear whether the SEC's inaction on Canary's spot Litecoin ETF is solely due to the government shutdown or a result of the new generic listing standards. Canary Capital had withdrawn its 19b-4 application on September 25 at the SEC's request, potentially contributing to the lack of a decision.
According to BlockBeats, James Seyffart indicated that the Canary Capital Litecoin ETF has technically reached its approval deadline. The SEC appears to require all such products to adhere to new universal listing standards, which may render the deadline insignificant.
Eleanor Terrett noted that the SEC still needs to sign off on the S-1 filing for the Litecoin ETF, but with the agency operating with a skeleton crew due to the shutdown, it is unclear what remaining staff are working on or their priorities. The SEC is also not able to respond to many press inquiries due to the shutdown.
Despite the uncertainty, analysts remain optimistic about the eventual launch of a Litecoin ETF. Seyffart stated, "We do still think they'll come in the near future".
The Canary Litecoin ETF is an exchange-traded fund that issues shares seeking to list and trade on the Nasdaq Stock Market LLC. It aims to provide investors access to the Litecoin market through a traditional brokerage account, avoiding the potential barriers and risks of directly acquiring and holding Litecoin. The Trust will not use derivatives that could expose it to additional counterparty and credit risks. As of January 2025, approximately 75.4 million LTC were outstanding.
The SEC's inaction adds to the broader uncertainty surrounding crypto ETFs amid evolving regulatory standards and governmental operations. The situation remains fluid, with the potential for further developments as the government shutdown continues and the SEC navigates its new listing standards.
