The U.S. Securities and Exchange Commission (SEC) has recently delayed decisions on several proposed crypto Exchange Traded Funds (ETFs), extending their review deadlines into October. These include ETFs related to Truth Social, Solana, and XRP. The agency needs more time to evaluate the proposed rule changes.
Truth Social Bitcoin and Ethereum ETF
The SEC has postponed its decision on the Truth Social Bitcoin and Ethereum ETF until October 8. This ETF, filed in June by NYSE Arca, is designed as a commodity-based trust holding Bitcoin (BTC) and Ether (ETH) directly, issuing shares backed by those assets. While branded under former U.S. President Donald Trump's Truth Social platform, it functions similarly to other spot Bitcoin and Ether ETFs already available. The SEC stated the extension was necessary to allow sufficient time to consider the proposed rule change. The ETF will hold a split allocation of 75% in Bitcoin and 25% in Ethereum, allowing investors to gain exposure to the two largest cryptos by market cap in one wrapper. While not the first ETF to combine Bitcoin and Ethereum, Truth Social's involvement has drawn attention due to its political and financial implications. A nonprofit watchdog group, Accountable.US, urged the SEC to reject the proposal, citing concerns about Trump's involvement in crypto ventures and potential conflicts of interest.
Solana ETFs
The SEC has also delayed its decision on multiple spot Solana ETFs proposed by firms like Bitwise, 21Shares, and Canary Capital, setting a new deadline of October 16. Cboe BZX seeks approval for the first U.S. spot Solana ETFs through filings from 21Shares and Bitwise. These ETFs would hold Solana (SOL) tokens, providing investors with a way to gain exposure to Solana's price performance. The delay reflects ongoing regulatory caution impacting the broader crypto ETF landscape and affects market sentiment, causing a slight drop in Solana's price. Despite the SEC's decision, fundamentals indicate strong institutional interest. The recently launched Solana Staking ETF has seen significant investment inflows and engagement from funds. Bloomberg ETF analyst James Seyffart expects standard spot Solana ETFs to be approved by mid-October.
XRP ETFs
The SEC has delayed decisions on three spot XRP ETF proposals from Bitwise, CoinShares, and 21Shares, extending the deadlines to October. The new deadline is October 19 for the 21Shares Core XRP Trust. The SEC also put out a similar release for Bitwise and CoinShares XRP ETFs. The Commission will now have until October to decide whether or not to approve these funds. The 21Shares Core XRP Trust, first filed in February, aims to hold XRP and track its market value. The SEC requires more time to assess the amended filing. CoinShares' XRP ETF, slated for the Nasdaq Stock Market, faces an extended deadline of October 23. The SEC initiated proceedings in May and has now designated additional time for a complete evaluation. Bloomberg ETF analysts previously noted that the delays are procedural and do not impact the likelihood of approval. XRP now sits alongside Litecoin and Solana as a top-tier candidate for a spot crypto ETF, with industry experts assigning a 95% chance that the SEC will authorize a fund tied to the fourth-largest digital asset.
Broader Implications
These delays are part of a broader trend of the SEC taking a cautious approach to crypto-based financial instruments. The agency has been filing ETF extensions throughout the summer, with many decisions expected in the fall. The SEC's extensions are meant to allow “sufficient time to consider the proposed rule changes and the issues raised therein". The SEC is also delaying decisions on other altcoin ETFs and pending filings.
