PENGU ETF Review Delayed as SEC Extends Evaluation Period for Pudgy Penguins and T. Rowe Price Funds

• The U.S. Securities and Exchange Commission (SEC) has extended the review period for the Pudgy Penguins (PENGU) and T. Rowe Price Active Crypto ETFs to evaluate market structure and investor protection concerns according to CoinMarketCap.
• The PENGU ETF, linked to the Pudgy Penguins NFT collection, is considered one of the more unconventional crypto ETF applications before the SEC, while the T. Rowe Price ETF is an actively managed fund targeting a diversified basket of digital assets as reported by BitDegree.
• The review period extension does not indicate approval or rejection but highlights the SEC's cautious approach to novel crypto products, including those involving NFTs and actively managed strategies according to AInvest.

The SEC has utilized the 19b-4 process to extend the review by up to 45 days, providing additional time to assess risks related to custody arrangements, valuation methodologies, and potential manipulation as detailed by Bitget. This process is standard for evaluating proposed rule changes and ensures consistency with the Securities Exchange Act according to Bitget.

The delay in the PENGU ETF decision has led to a 6% price correction in Pudgy Penguins tokens, as traders reassess the risks associated with regulatory uncertainty according to AInvest. Meanwhile, Pudgy Penguins has launched several strategic initiatives, including a collaboration with Care Bears and a mobile game with 1 million downloads, which aim to expand its brand beyond the crypto space as reported by CoinMarketCap.

The SEC's extended evaluation period underscores broader concerns around market fairness and investor protection, especially for products tied to niche or speculative markets according to CoinMarketCap. Analysts are watching for regulatory clarity on custody and valuation of digital assets, as these decisions could influence the broader adoption of crypto ETFs according to CoinMarketCap.

Why Is the SEC Delaying the PENGU ETF Approval?

The SEC has cited concerns about the volatility and market stability of NFTs, particularly after the Pudgy Penguins collection saw a sharp drop in floor prices following the launch of its native token according to AInvest. The PENGU ETF, designed to track the Pudgy Penguins NFT ecosystem, has been under review since mid-2025 and was revised in July 2025 as reported by AInvest. The extended evaluation period reflects the SEC's need for more time to assess unconventional products that move beyond traditional blue-chip crypto exposure according to CoinMarketCap.

The SEC's delay does not imply final judgment but rather that the commission needs more time to assess these products that extend beyond blue-chip crypto exposure according to CoinMarketCap. The Pudgy Penguins' move into mainstream markets with real-world utility helps decouple the PENGU token from purely speculative value and creates a more robust foundation for its valuation according to AInvest.

What Are the Implications for the Broader Crypto ETF Market?

The outcome of the SEC's evaluation of the PENGU and T. Rowe Price ETFs could influence the broader adoption of crypto ETFs and provide new investment tools for institutional and retail investors according to CoinMarketCap. The approval of such options could signal a willingness to expand the derivatives market for crypto assets beyond Bitcoin and Ether according to AInvest.

The SEC's extended evaluation period highlights its ongoing balancing act between fostering innovation and ensuring investor protection in the evolving digital asset landscape according to AInvest. The delays reflect the SEC's need for more time to evaluate products that move beyond traditional blue-chip crypto exposure according to CoinMarketCap.

The SEC's public comment period on the Grayscale CoinDesk Crypto 5 ETF options reflects its broader regulatory caution according to AInvest. The final decision on the PENGU and T. Rowe Price ETFs is likely to come by late February or early March 2026, though further delays remain possible according to AInvest.