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- Litecoin spot ETF by Canary Capital remains in regulatory limbo as the SEC misses its Thursday deadline.
- The SEC’s shift to S-1 filings and the government shutdown delay progress on the Litecoin ETF approval.
- Analysts stay hopeful as new SEC standards may expedite approvals for altcoin ETFs, including Solana.
The Litecoin spot ETF presented by Canary Capital remains in regulatory purgatory since the SEC did not respond to the application as of Thursday. This latitude has confounded the crypto industry, with modifications to rules on ETF applications coupled with the impending possibility of a national government shutdown making the matter even more complicated.
This year, the SEC asked companies to recall their 19b-4 submissions, used to implement exchange rule alterations. Instead, the SEC suggested that companies use S-1 registration statements. Canary Capital amended its 19b-4 filing on September 25 in accordance with this recommendation, which indicated a change in direction. The new framework of the SEC raises doubts on the old deadline, 19b-4.
Litecoin ETF Faces Setback Amid SEC Shutdown Plan
The situation is further complicated by a potential government shutdown. The SEC has announced that it will remain operational during the shutdown; however, under the contingency plan, it has been clarified that the SEC will not authorize any new financial products, including ETFs. The delay with the Litecoin ETF application is possible because of the withdrawal of the filing or closure.
Canary is already on a list of ETFs based on the altcoin. These are Solana, XRP, and Dogecoin proposals. With its approval, these ETFs would add on to Bitcoin and Ethereum spot ETFs, which have already brought up more than $74 billion in funds.
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SEC’s New Listing Standards May Accelerate ETF Approvals
Analysts are still optimistic, in spite of the regulatory uncertainty. Eric Balchunas from Bloomberg believes that the SEC’s adoption of new listing standards, particularly under Rule 6c-11, could expedite this process. SEC Chairman Paul Atkins has indicated that these effective changes will streamline the operation and reduce the barriers faced by investors.
Major asset managers are still filing. Fidelity and Franklin Templeton are among the companies that have recently updated their filings of spot Solana ETFs, some with staking options. ETF analysts believe these approvals will be granted before mid-October, which is a key time frame in the digital asset products realm.
Solana increasingly gains momentum in the institutional sector. According to analysts, both the U.S. and Europe are recording high inflows, which implies that Solana will soon become a large altcoin among institutions. Such an increase could also create a pathway to approving spot Ethereum ETF products, particularly those with staking options.
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