SEC Delays Decision on Canary Capital’s Litecoin ETF

SEC Examines Fraud Prevention in ETF Proposal

The SEC’s delay in the decision on the Canary Capital’s Litecoin ETF application reflects ongoing regulatory scrutiny. This marks one of the first decisions by new SEC Chair Paul Atkins.

Canary Capital’s application was submitted in October 2024, aiming to attract traditional investors to Litecoin. The SEC’s decision introduces a public comment period to evaluate potential fraud prevention mechanisms. Eleanor Terrett noted on Twitter that:

“The SEC has initiated a public comment period focused on assessing whether the ETF meets regulatory requirements to prevent fraud and manipulation.”

Litecoin Price Drops 5% After SEC Announcement

Following the SEC announcement, Litecoin experienced a 5% price decrease, indicating market volatility in response to regulatory actions. Investors have shown caution due to the uncertainty of ETF approval.

The SEC’s action underscores its focus on market integrity and investor protection, insisting that ETFs prevent fraud and manipulation. This approach affects broader digital asset investment sentiments.

Similar Delays Affect Past Crypto ETF Applications

This delay follows a pattern observed with other crypto ETFs like XRP and Dogecoin, illustrating a consistent regulatory approach. Analysts predicted this postponement rather than a direct approval or rejection. As James Seyffart, a Bloomberg Analyst, commented:

“There is a high probability that the final decision will be postponed rather than directly approved or rejected.”

With leadership changes at the SEC, industry experts believe there could be new perspectives on crypto ETF applications, potentially resulting in different regulatory outcomes compared to previous decisions.