SEC Delays SUI ETF Decision Citing Market Manipulation Concerns SUI Price Drops 1.41%

The U.S. Securities and Exchange Commission (SEC) has delayed its decision on Canary’s application for a spot exchange-traded fund (ETF) tracking the SUI token, the native cryptocurrency of the Sui blockchain. This delay has left investors in a state of uncertainty, as they await further updates on the regulatory approval process. The SEC cited ongoing concerns about potential market manipulation and inadequate investor protections as the primary reasons for the delay. The new deadline for a verdict is set for the 24th of July.

This delay is not an isolated incident, as the SEC has been cautious about approving spot ETFs for cryptocurrencies. The agency has approved several crypto ETFs based on futures trading, but the review process for spot ETFs is rigorous and can take several months. This process involves public feedback and legal checks, making it a lengthy and complex procedure. Canary will have to wait until the next review period to hear the SEC’s final decision.

The delay has had a visible impact on SUI’s price, which fell by 1.41% over the past day and stood at $3.15. Technical indicators such as the Relative Strength Index (RSI) and the MACD also pointed to a bearish trend, reinforcing the cautious mood among traders. This postponement of the SUI ETF decision by the SEC has dampened investor sentiment, especially in already fragile market conditions.

Adding to the unease, the Sui network recently made headlines for another reason — validators reportedly locked up approximately $162 million in stolen assets connected to the recent Cetus protocol exploit. This double blow of regulatory delay and security concerns has placed the project under intense scrutiny. Analysts believe the SEC’s repeated delays underscore a broader hesitance to fully integrate crypto into the existing financial regulatory framework. This cautious approach highlights the agency’s struggle to reconcile decentralized assets with rules designed for traditional markets.

Therefore, until comprehensive and tailored regulations are introduced, the SEC is likely to continue taking a slow and conservative stance. The crypto community is closely watching the developments, as spot ETFs promise quicker and more direct access to crypto assets for investors. The SEC has not set a date for its next update, leaving the industry in a state of anticipation. The delay underscores the regulatory scrutiny that crypto-based financial products face, reflecting the broader challenges in integrating cryptocurrencies into traditional financial systems.