SEC delays Grayscale ADA and Canary PENGU ETF decisions to October 2025 due to regulatory concerns

The U.S. Securities and Exchange Commission (SEC) has delayed decisions on several pending spot cryptocurrency ETF applications, including those from Grayscale and Canary Capital, pushing the expected timeline to October 2025 [1]. The move, announced on August 25, was driven by ongoing concerns related to market structure, custodial arrangements, and investor protection mechanisms for altcoin-based products [1]. The delayed decisions now include applications for the Grayscale Cardano (ADA) ETF and the Canary Pudgy Penguins (PENGU) ETF, both of which will require additional documentation to address unresolved regulatory issues [1].

The extension adds to the uncertainty surrounding the approval of spot crypto ETFs in the U.S., a process that has already seen multiple delays and rejections. The SEC has indicated that it needs more information—particularly on surveillance-sharing agreements and custodial frameworks—to ensure compliance with federal securities laws [1]. This delay is seen as an extension of the SEC’s historically cautious approach, especially when it comes to altcoins, which carry higher volatility and liquidity risks compared to Bitcoin and Ethereum [1].

Market reactions have already begun to reflect this uncertainty. For instance, Pudgy Penguins (PENGU) dropped by 12.65% over the past 24 hours, with a trading volume of $506 million during that period [1]. This volatility underscores how sensitive the crypto market is to regulatory developments. The SEC’s hesitation also contrasts with its previous handling of Bitcoin and Ethereum-focused ETFs, which have faced fewer obstacles, suggesting a more stringent review process for products involving less-established digital assets [1].

Analysts suggest that the extended timeline could give ETF issuers more time to refine their proposals and better align with the SEC’s expectations. This may, in turn, increase the chances of conditional approvals [1]. However, for now, investors are being advised to reassess their risk exposure and monitor updates closely, as the outcome remains contingent on resolving the SEC’s outstanding concerns [1].

The delay also opens a window for further regulatory dialogue, potentially leading to adjustments in the framework that governs digital asset products. Market participants are encouraged to prepare for eventual product launches by evaluating hedging strategies and liquidity needs, while staying informed through official filings and communications from issuers [1]. As the October 2025 deadline approaches, it will serve as a key benchmark for both market players and regulators, with the potential to set a precedent for future crypto ETF approvals in the U.S. [1].

Source: [1] SEC Postpones Decisions on Canary spot PENGU and Grayscale spot Cardano ETFs, May Weigh on Market Sentiment (https://en.coinotag.com/sec-postpones-decisions-on-canary-pengu-and-grayscale-spot-cardano-etfs-may-weigh-on-market-sentiment/)