The SEC Delays Canary Litecoin ETF: What’s the Real Cause?
- The SEC’s silence on Canary’s Litecoin ETF raises uncertainty over approval timing.
- New generic listing standards make previous 19b-4 ETF deadlines irrelevant, analysts say.
- Government shutdown stalls over 90 pending crypto ETF applications across multiple assets.
Canary Capital’s spot Litecoin ETF is at a crossroads after the U.S. Securities and Exchange Commission (SEC) missed its October 2 decision deadline. The setback comes during a partial federal government shutdown, leaving crypto investors uncertain about approval timelines and how new generic listing standards will affect dozens of pending applications. Analysts say the ETF’s launch remains possible but delayed.
SEC Silence Over Litecoin ETF Deadline
The missed deadline followed Canary Capital’s withdrawal of its 19b-4 filing on September 25 at the SEC’s request. According to Bloomberg ETF analyst James Seyffart, the commission instructed issuers to move filings to the new generic listing standards. This procedural change means earlier 19b-4 deadlines may no longer matter.
Eleanor Terrett, a Fox Business reporter, confirmed that the SEC still needs to approve the S-1 filing for the ETF. However, the shutdown left the agency operating with minimal staff. She added that the commission was not responding to most press inquiries during this period, further leading to uncertainty.
The SEC had previously outlined its contingency plan in August, noting it would not review or approve registration statements during a shutdown. That directive included new financial products and rule changes, putting the Canary ETF and other crypto filings in question.
New Listing Standards Disrupt ETF Timeline
The generic listing standards, introduced in September, streamline the approval process under Rule 6c-11. These standards effectively replace the 240-day review period required under older procedures.
Canary’s withdrawal of its 19b-4 aligned with the SEC’s request, but it also complicated market expectations around the October 2 deadline. Seyffart noted that clients have asked repeatedly whether the deadline still applied.
He emphasized that the SEC’s request made the timeline less relevant, though the shutdown “throws a wrench into things.” Despite this, he said the expectation is that Litecoin’s ETF will launch in the near future.
The new standards are intended to reduce barriers for digital asset products, according to SEC Chair Paul Atkins. Analysts suggest the rules could accelerate approvals once the commission resumes normal operations. However, until then, uncertainty continues to dominate the conversation.
Related: SEC Streamlines Process for Spot Crypto and Altcoin ETFs
Shutdown Stalls Over 90 Crypto ETF Applications
The shutdown’s impact extends beyond Litecoin. More than 90 digital asset products are awaiting SEC decisions, including ETFs tied to Solana, XRP, Dogecoin, Avalanche, and Chainlink. As per the report, U.S. spot Bitcoin and Ether ETFs have already drawn inflows of $61.3 billion and $13.4 billion since launch.
Analysts such as Nate Geraci of the ETF Institute warned that a prolonged shutdown would delay this momentum. He described the freeze as putting “ETF Cryptober on hold.” The SEC confirmed it would keep its EDGAR database running but noted that staff availability remained “very limited.”
Deadlines for other products are approaching quickly. Solana ETF applications face an October 10 decision date, while XRP and Dogecoin ETFs await rulings next week. Yet, with the shutdown ongoing, those dates may prove equally uncertain.
Meanwhile, the SEC’s missed deadline on Canary’s Litecoin ETF indicates the collision between regulatory outlook and a federal shutdown. Analysts James Seyffart and Eleanor Terrett confirmed deadlines tied to 19b-4 filings may no longer hold weight. With over 90 crypto ETFs pending, the timeline now depends on the agency’s return to full operations.
