SEC Holds Decision on Canary Capital’s Litecoin Spot ETF Due to Shutdown Uncertainty

Canary Capital’s Litecoin Spot ETF Stuck in Regulatory Pause: SEC Remains Silent Amid Shutdown and New Listing Standards That Change Approval Process

Canary Capital’s Litecoin Spot ETF Blocked Due to SEC Silence

Canary Capital’s application to launch a Litecoin (LTC) spot ETF has gone unanswered: The U.S. Securities and Exchange Commission (SEC) failed to take action on Thursday, within the deadline. This has created uncertainty among market participants about how the SEC will proceed during the ongoing government shutdown.

An additional factor is the new general listing standards that make the former Form 19b-4 virtually redundant. The SEC has asked applicants to withdraw those documents, leaving only the S-1 registration statement as the main consideration.

Impact of government shutdown

In August, the SEC released a “shutdown action plan” that explicitly stated that it would not review or approve new financial product applications.

While the regulator is formally still operating, it has only a “very limited” staff. The EDGAR filing database is up and running, but the SEC did not explain whether the Canary ETF delay was due to the shutdown or the transition to new rules.

Canary withdraws 19b-4 filing

On September 25, Canary Capital withdrew its 19b-4 filing at the SEC’s request, complicating an expected decision. That raised questions about what would happen to other filings that left 19b-4s in place.

ETF analysts say the old deadlines may now be irrelevant, and the SEC’s silence signals a structural change in the process.

Cryptocurrency Spot ETF Market

The U.S. crypto spot ETF market has already attracted more than $75 billion in investment. The main flows fell on Bitcoin ETFs ($61.3 billion) and Ether ETFs ($13.4 billion), which were launched last year.

ETFs on Solana, XRP, Avalanche, Cardano, Chainlink and Dogecoin are in the pipeline. Their appearance could significantly expand investors’ options.

Bloomberg analyst Eric Balchunes recently raised the probability of approval of some applications to 100%, citing new listing standards under Rule 6c-11. SEC Chairman Paul Atkins said that these changes will reduce barriers to entry for digital products and shorten approval times, which could previously take up to 240 days.