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- The U.S. SEC has delayed its decision on the Canary Spot Litecoin ETF.
- The delay allows more time for the evaluation of the proposal’s impact.
- The SEC is seeking public comments before making a final decision.
The U.S. Securities and Exchange Commission (SEC) has postponed its decision regarding the proposed Canary Spot Litecoin ETF. The decision allows the SEC more time to review the potential risks and benefits of the proposal.
Delayed examination will be crucial in that it will provide the SEC the chance to delve into the legal and policy ramifications in good earnest. It represents a major stride in the debate surrounding the investment potential existing in traditional markets for crypto.
Nasdaq submitted a listing and trading application for the shares of the Canary Litecoin ETF on 15 January 2025. The ETF tracks the performance of the Litecoin (LTC) by using the CoinDesk Litecoin Price Index (LTX). The investment policy of the fund involves investment in the LTC and cost adjustment.
These shares would be traded on a daily basis against the LTC index at 4:00 p.m. Eastern Time. The main aim of the ETF would be to enable investors to invest in Litecoin on a regulated exchange.
Investors can buy and sell ETF shares. These shares represent a portion of the underlying Litecoin assets. The ETF will hold only LTC and cash. This ensures a clear and direct link to the cryptocurrency’s price.
SEC Seeks Input on Crypto Volatility and Risks
The delay in the SEC’s process for approval enables the ETF proposal to undergo closer scrutiny. The Commission is weighing whether the new rule change meets the requisite rules for preventing fraudulent and deceptive activities in the market.
The SEC also invited public comment on these matters. The SEC’s ultimate decision will turn on whether the proposal satisfies the requirements of Section 6(b)(5) of the Securities Exchange Act of 1934 in order to safeguard investors and the public interest.
The SEC is concerned the proposal might add new risks, as crypto assets are highly volatile. They’re asking the public whether the fund’s framework addresses market manipulation and investor protection.
Decision Delay Aims for Thorough Evaluation
The SEC has requested written public comments. Parties that are interested may provide their opinions about whether the ETF proposal complies with current securities law. These comments need to be provided within a specific deadline.
The SEC will review the feedback and use it as a part of their decision-making process. Upon examining all public comments on the matter, the SEC will release a public notice of the approval or denial of the proposed Canary Spot Litecoin ETF.
The review is a key step toward using cryptocurrency in traditional markets. It could set a precedent for other crypto-based investment products. The delay allows more time for careful, informed consideration. This includes its impact on both traditional and crypto markets.
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