SEC Extends Review Periods for Multiple Cryptocurrency ETFs

The U.S. Securities and Exchange Commission (SEC) has extended the review periods for multiple cryptocurrency ETF applications, including those for Dogecoin and Hedera. The SEC instituted formal proceedings on June 11 for the Bitwise Dogecoin ETF and on June 12 for the Grayscale Hedera Trust, extending deadlines while requesting additional public comments. A similar document on Canary Capital's HBAR ETF was published on June 10.
Four separate Solana ETF proposals from Bitwise, 21Shares, VanEck, and Canary Capital have been postponed to early July 2025. The Grayscale Cardano ETF received a July 15 extension, while Bitwise's Ethereum staking ETF faces a July 6 deadline. The regulator said it seeks further public comments and has not made any final determinations on the filings.
The SEC's decision to postpone the approval of these ETFs is part of its cautious approach towards crypto ETFs, reflecting a priority on thorough regulatory oversight. The regulator seeks and encourages interested persons to provide comments on the proposed rule change. The delays do not indicate that the Commission has reached any conclusions with respect to any of the issues involved.
When exchanges want to list new ETF products, they must file "proposed rule changes" with the SEC to modify their own listing standards to accommodate the new products. The "legal and policy issues" the SEC mentions relate to whether these crypto-based ETFs meet the standards to "prevent fraudulent and manipulative acts and practices" and "protect investors and the public interest" as required by Section 6(b)(5) of the Securities Exchange Act.
The SEC then reviews whether these exchange rule modifications comply with federal securities laws. For the Bitwise Dogecoin ETF, NYSE Arca filed to list and trade the ETF under NYSE Arca Rule 8.201-E, with shares designed to track the performance of a specific commodity or derivative, as the exchange maintains fair and transparent trading. For Grayscale’s proposed Hedera ETF, Nasdaq filed to list the ETF under Nasdaq Rule 5711(d), which shares similar aspects to the NYSE rules, setting a framework for how these trust shares are structured, traded, and monitored. Canary's HBAR ETF proposal is also being reviewed under this rule.
The delay in the approval of these ETFs affects institutional interest in the respective cryptocurrencies, as investors anticipate market access through an ETF. Approval could significantly increase liquidity and demand for these cryptocurrencies, impacting their market dynamics. The visibility and acceptance of such ETFs could enhance mainstream adoption of blockchain assets. However, the delay temporarily stalls these potential benefits.

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