The deadline for the decision on the Canary Litecoin ETF has seemingly been missed by the U.S. Securities and Exchange Commission (SEC), which is adding to the uncertainty amid a government shutdown and new generic listing standards.
Canary Capital’s spot Litecoin exchange-traded fund is in limbo after the U.S. Securities and Exchange Commission (SEC) took no action on Thursday, which was the original deadline for a decision to be made by it.
The SEC’s lack of communication has rendered the crypto sphere unsure regarding the regulator’s operational capacity amidst a federal government halt, and how its novel generic listing criteria might impact the schedules of numerous crypto ETF applications awaiting endorsement.
It was observed by Bloomberg ETF analyst James Seyffart and FOX News reporter Eleanor Terrett that the antiquated 19b-4 cutoff dates for crypto ETF filings might have lost their pertinence, since applicants have been requested by the SEC to rescind them, thereby designating the S-1 registration document as the solitary instrument necessitating regulatory sign-off.
Nonetheless, an additional level of unpredictability is cast over that due to the ongoing government stoppage.
An “Operation Scheme” was publicized by the SEC in August for the possibility of a governmental closure, proclaiming that applications for enrollment would “not be examined and sanctioned.” This encompasses novel monetary instruments, alterations to self-regulatory body directives, and the scrutiny or expedited implementation of enrollment documents.
It is not yet determined whether the SEC’s lack of action regarding Canary’s spot Litecoin ETF stems merely from the governmental closure or if the outcome is also a consequence of the novel general listing criteria, which would invalidate the 19b-4 cutoff date.
Canary’s Withdrawal of 19b-4 Filing Adds New Complexity
The 19b-4 application was retracted by Canary on September 25 upon the SEC’s prompting, an event that could have been a factor in the SEC’s lack of a determination on Thursday. The consequence of the 19b-4 submissions on entities that have not recalled that instrument remains undetermined.
Inquiry was made by to the SEC and Canary for a statement, yet an immediate reply was not obtained.
SEC Operates in Reduced Mode Amid Shutdown
In consideration of the governmental closure that began on Wednesday, it was declared by the SEC that operations would proceed, yet with only a “very restricted” count of personnel being on hand.
The Electronic Data Gathering, Analysis and Retrieval (EDGAR) database was stated by the SEC to continue functioning.
Altcoins Eye Share of $75B U.S. Spot ETF Market
The market has been preparing for the possible sanctioning of numerous novel spot crypto ETFs, which encompass LTC, Solana (SOL), XRP, Avalanche (AVAX), Cardano (ADA), Chainlink (LINK), and Dogecoin (DOGE).
Any endorsement would augment the currently accessible U.S. spot Bitcoin (BTC) and Ether (ETH) ETFs, which have drawn in $61.3 billion and $13.4 billion in capital since their debut last year.
Despite the hindrances, it was stated on Monday by Bloomberg ETF analyst Eric Balchunas that the likelihood of some spot crypto ETF endorsements has been elevated to due to the SEC’s novel listing protocols.
The listing criteria are anticipated to rationalize the procedure pursuant to Rule 6c-11, notably diminishing sanctioning periods, which generally consume a maximum of 240 days.
The new listing criteria were stated by SEC Chair Paul Atkins to diminish obstacles to obtaining digital asset offerings and present a wider array of options to investors.
