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

The SEC has delayed its decision on the Pudgy Penguins (PENGU) and T. Rowe Price Active Crypto ETFs to allow deeper evaluation of custody, valuation, and market manipulation concerns.

• The PENGU ETF's hybrid token-NFT structure is seen as unconventional, raising questions about its alignment with market integrity and investor protection standards according to CoinMarketCap.

• The extended evaluation period has introduced regulatory uncertainty, impacting the Pudgy Penguins token price and investor behavior in the NFT market.

The U.S. Securities and Exchange Commission has extended the review period for the Pudgy Penguins (PENGU) and T. Rowe Price Active Crypto ETFs to evaluate custody, valuation, and market manipulation risks. The PENGU ETF is designed to offer exposure to the Pudgy Penguins NFT collection and is regarded as one of the more unconventional crypto ETF proposals due to its hybrid structure combining tokens and physical NFTs as reported by AInvest.

The SEC's decision to extend the evaluation period is part of its 19b-4 process, which allows up to 45 additional days to review the applications. This reflects a broader need for additional time to evaluate unconventional financial products. The SEC has been cautious in evaluating crypto-related investment vehicles, particularly those involving NFTs and digital assets, due to concerns about market fairness.

The PENGU ETF faces unique challenges due to its hybrid structure, which includes both token and NFT exposure, making it more complex than traditional ETFs. The SEC is examining whether the product aligns with market integrity standards and investor protection requirements. The extension of the evaluation period has introduced regulatory uncertainty, leading to a 6% price decline in Pudgy Penguins tokens and a drop in weekly NFT sales. This uncertainty has also led to a shift in investor behavior, with capital increasingly flowing into alternative funds as investors balance innovation with compliance.

What Is the SEC Concerned About with the PENGU ETF?

The SEC is primarily concerned with custody, valuation, and market manipulation risks associated with the PENGU ETF's hybrid token-NFT structure. These concerns are part of a broader regulatory scrutiny of crypto-NFT products and unconventional financial instruments as detailed in AInvest's report.

The PENGU ETF is designed to offer exposure to the Pudgy Penguins NFT collection and is considered an unconventional crypto ETF proposal due to its hybrid token-NFT structure. The SEC is examining whether the product aligns with market integrity standards and investor protection requirements according to CoinMarketCap.

The extended evaluation period highlights broader regulatory challenges in the crypto-NFT space, including the need for clear frameworks to address volatility, custody, and market manipulation risks. The PENGU ETF is expected to be a key indicator for future regulatory approaches to crypto-NFT products, as its approval could set a regulatory precedent for similar investment vehicles as reported by AInvest.

What Impact Has the SEC's Delay Had on Pudgy Penguins?

The SEC's delay in approving the PENGU ETF has led to a 6% price decline in Pudgy Penguins tokens and a drop in weekly NFT sales. This uncertainty has also led to a shift in investor behavior, with capital increasingly flowing into alternative funds as investors balance innovation with compliance as noted by AInvest.

The Pudgy Penguins project has expanded beyond the digital art space into gaming, consumer products, and licensing through partnerships with brands like Walmart and Care Bears. These efforts aim to enhance the PENGU token's real-world utility and adoption according to AInvest.

The PENGU ETF is expected to be a key indicator for future regulatory approaches to crypto-NFT products, as its approval could set a regulatory precedent for similar investment vehicles. The T. Rowe Price Active Crypto ETF, which diversifies beyond Bitcoin and Ethereum, also represents traditional institutions' growing engagement with non-traditional assets as reported by AInvest.

Final decisions on both the PENGU and T. Rowe Price ETFs are expected by late February or early March 2026. The SEC's extended review period highlights broader regulatory challenges in the crypto-NFT space, including the need for clear frameworks to address volatility, custody, and market manipulation risks as detailed in AInvest's report.

Pudgy Penguins is currently at a critical inflection point on the daily chart, positioned near a potential breakout zone. A close above $0.01294–$0.01381 could confirm a bullish reversal pattern, validating the bullish thesis and potentially leading to sustained upward movement according to AInvest.

These mainstream initiatives decouple the PENGU token from purely speculative value, creating a stronger fundamental floor for its valuation. By building real-world utility and brand recognition, Pudgy Penguins is positioning itself for long-term growth beyond short-term crypto sentiment as reported by AInvest.

The SEC's delays in approving the PENGU ETF have caused a 6% price correction as traders reassess risk. The ETF is a hybrid instrument holding both PENGU tokens and NFTs, and its approval could set a precedent for similar products in the NFT and IP-based token space according to AInvest.

The extended evaluation highlights broader regulatory concerns around manipulation and investor protection, particularly for products tied to niche markets. The Pudgy Penguins project is expanding beyond the digital space through strategic initiatives, including a collaboration with Care Bears, a mobile game titled Pudgy Party with over 1 million downloads, and a high-profile campaign on the Las Vegas Sphere according to AInvest.

These efforts help build mainstream appeal, attracting non-crypto-native audiences and validating the project's long-term potential. The mobile game demonstrates the project's ability to reach a broader demographic and build real-world utility for the PENGU token according to AInvest.

The Care Bears collaboration further enhances brand IP value and marketability, expanding Pudgy Penguins' reach into legacy pop culture through physical collectibles and co-branded products according to AInvest.

The SEC has extended its decision deadlines for the Canary Pudgy Penguins (PENGU) ETF and the T. Rowe Price Active Crypto ETF by utilizing the 19b-4 process. This standard review period enables the SEC to lengthen its evaluation timeframe, indicating a cautious approach to assessing crypto products as reported by AInvest.

The extended review reflects broader regulatory scrutiny around unconventional instruments, particularly those tied to niche or speculative markets. The regulator also opened a public comment window on a proposal to list standardized options on the Grayscale CoinDesk Crypto 5 ETF, which tracks five large-cap digital assets according to AInvest.

The SEC's extension of the evaluation period for the PENGU ETF does not signal a final judgment but rather indicates that the commission wants additional time to assess products that stretch beyond blue-chip crypto exposure as noted by CoinMarketCap.

The SEC is also examining whether the PENGU ETF aligns with market integrity standards and investor protection requirements. The delay has introduced regulatory uncertainty, leading to a 6% price decline in Pudgy Penguins tokens.

The Pudgy Penguins project is expanding beyond digital art into gaming and consumer products to boost the PENGU token's real-world utility. These efforts aim to enhance the PENGU token's real-world utility and adoption as reported by AInvest.

The SEC's extended evaluation period for the PENGU ETF reflects broader regulatory challenges in the crypto-NFT space, including the need for clear frameworks to address volatility, custody, and market manipulation risks as detailed in AInvest's report.

The SEC's delays in approving the PENGU ETF have caused a 6% price correction as traders reassess risk. The ETF is a hybrid instrument holding both PENGU tokens and NFTs, and its approval could set a precedent for similar products in the NFT and IP-based token space according to AInvest.

The extended evaluation highlights broader regulatory concerns around manipulation and investor protection, particularly for products tied to niche markets. The Pudgy Penguins project is expanding beyond the digital space through strategic initiatives, including a collaboration with Care Bears, a mobile game titled Pudgy Party with over 1 million downloads, and a high-profile campaign on the Las Vegas Sphere according to AInvest.