What to Know:
- Canary Capital’s spot Litecoin ETF is left in uncertainty as the SEC takes no action.
- New generic listing standards from the SEC may alter the timelines for crypto ETF applications.
- Despite the challenges, the odds of some spot crypto ETF approvals have been tipped to 100%.
The XRP community, like the wider crypto market, is gripped by the suspense surrounding Canary Capital’s spot Litecoin Exchange-Traded Fund (ETF) after the US Securities and Exchange Commission (SEC) failed to act on its deadline. This inaction has stirred uncertainty within the crypto space, casting doubts on the regulator’s operations amid a federal government shutdown and its new generic listing standards.
Analysts, such as Bloomberg ETF’s James Seyffart and FOX News’ Eleanor Terrett, have noted that the old 19b-4 deadlines for crypto ETF applications might be rendered obsolete. The SEC has requested applicants to withdraw these deadlines, leaving the S-1 registration statement as the only document requiring regulatory approval.
However, the issue is further complicated by the government shutdown. In August, the SEC released an “Operation Plan” for a potential shutdown, revealing that it would cease to review and approve applications for registration. This cessation affects new financial products and self-regulatory organization rule changes, along with reviewing or accelerating the effectiveness of registration statements.
It remains unclear whether the SEC’s silence on Canary’s spot Litecoin ETF is solely due to the government shutdown, or whether it also involves the new generic listing standards, which could render the 19b-4 deadline irrelevant. Canary withdrew its 19b-4 application on Sept. 25 at the SEC’s request, adding another layer of complexity to the situation.
Despite the shutdown, the SEC has stated that it will continue its operations, albeit with a significantly reduced staff. Its Electronic Data Gathering, Analysis and Retrieval (EDGAR) database will remain operational.
The crypto market, worth $75 billion in the US, is eagerly anticipating the potential approval of several new spot crypto ETFs. These include not only Litecoin but also Solana (SOL), XRP (XRP), Avalanche (AVAX), Cardano (ADA), Chainlink (LINK), and Dogecoin (DOGE). Any approval would boost the existing US spot Bitcoin (BTC) and Ether (ETH) ETFs, which have attracted $61.3 billion and $13.4 billion in inflows since their launch last year.
Despite the current hurdles, Bloomberg ETF analyst Eric Balchunas has suggested that the SEC’s new listing standards have increased the chances of some spot crypto ETF approvals to 100%. According to SEC Chair Paul Atkins, these new standards will reduce barriers to accessing digital asset products and offer investors more choice.
In conclusion, the crypto market, including Ripple and Bitcoin traders, is watching closely as the SEC navigates through its current challenges. The potential for new spot crypto ETFs, combined with the SEC’s new listing standards, signals a bullish future for the crypto market. The impact of these developments on institutional adoption, regulation, and the broader macroeconomic context will be keenly observed by both investors and traders.
