SEC's Delay Signals Push for Unified Crypto ETF Rules

The U.S. Securities and Exchange Commission (SEC) has delayed decisions on two altcoin exchange-traded funds (ETFs)—Canary HBAR and Grayscale Polkadot (DOT)—until November 8, according to recent filings. The additional 60-day extension marks the third delay for the Canary HBAR ETF since March and the second for the Grayscale Polkadot ETF. The SEC cited the need for more time to finalize the Generic Listing Standards for spot crypto ETFs, a broader regulatory framework it is reportedly finalizing in collaboration with major exchanges including Nasdaq, NYSE, and CBOE BZX [1].

The delay does not appear to indicate rejection of the proposals but rather reflects the SEC’s caution in establishing a consistent regulatory approach for crypto-based ETFs beyond Bitcoin and Ethereum. The agency is reportedly seeking alignment among exchanges on the definition of “commodity,” including removing “excluded commodities” from the criteria to facilitate broader crypto ETF approvals. This procedural pause has not dampened market optimism; HBAR has risen approximately 1.8% weekly, while DOT has surged nearly 4% to $4.03, with a significant 225% spike in 24-hour trading volume [2].

Both the Canary HBAR ETF and the Grayscale Polkadot ETF were submitted under commodity-based trust rules. The Canary HBAR ETF, initially filed by Nasdaq in February, entered a 180-day review period on March 13. The SEC previously requested additional public comments regarding its suitability for listing under these rules. Similarly, the Grayscale Polkadot ETF, which has followed an almost identical timeline, is now also set for a decision on November 8 [3]. Analysts have noted that the tokens’ compliance with regulated futures markets strengthens their case for approval, mirroring the criteria used for Bitcoin and Ethereum ETFs.

Despite the uncertainty, market analysts remain confident in the eventual approval of these ETFs. Bloomberg senior analysts estimate a 90% likelihood of approval once the SEC finalizes its generic listing standards. James Seyffart, a senior analyst at Bloomberg, stated that HBAR and DOT ETFs are “pretty much ready to go” within the next few months [1]. The market’s positive reaction to the delay underscores this confidence, with investors viewing the procedural delay as a sign of progress rather than a setback.

The broader implications of these developments point toward the SEC’s efforts to create a standardized framework for crypto ETFs. Once finalized, this framework could pave the way for a new wave of altcoin ETFs, not just for HBAR and DOT but for other tokens that meet the necessary compliance and market infrastructure criteria. Analysts suggest that approval of these two ETFs could signal a broader regulatory shift toward recognizing altcoins as legitimate assets within the ETF structure [2].

HBAR and DOT prices have demonstrated resilience, with HBAR trading at $0.22 and DOT at $4.03 as of the latest data. Both tokens have seen significant trading volume increases, reinforcing the market’s belief that the SEC is working toward a favorable outcome. While November 8 remains the key date on the calendar, the broader market is already positioning for a successful approval, with price forecasts suggesting a potential over 100% upside for both assets if the ETFs are approved [3].

Source: [1] SEC Pushes Back Decisions on HBAR and DOT ETFs, Analysts Remain Optimistic (https://finance.yahoo.com/news/sec-pushes-back-decisions-hbar-104013632.html) [2] SEC Delays Decision on HBAR and Polkadot ETFs Until November 8 (https://coinpedia.org/news/sec-delays-decision-on-hbar-and-polkadot-etfs-until-november/) [3] US SEC Delays Canary HBAR and Grayscale Polkadot ETFs (https://coingape.com/us-sec-delays-canary-hbar-and-grayscale-polkadot-etf-heres-why/)