SEC Extends Review of Polkadot and Hedera ETFs to September 9 2025

The U.S. Securities and Exchange Commission (SEC) has delayed its decision on the approval of Polkadot (DOT) and Hedera (HBAR) cryptocurrency ETFs, extending the review period for these significant proposals. This delay underscores the SEC’s cautious approach to crypto ETF approvals, as it seeks additional time to analyze market implications and gather public feedback on the filings. The extended review phase allows for a more thorough examination of the proposed rule changes, reflecting the agency’s commitment to regulatory diligence in the evolving crypto landscape.

The SEC’s decision to defer the timeline for these ETFs, initially expected to reach a conclusion by June 11, 2025, has been extended to allow for a more exhaustive review process. This extension is part of the agency’s procedural framework, which permits multiple delays to ensure all regulatory concerns and public comments are adequately addressed. Grayscale’s proposal aims to convert its existing Polkadot Trust into an ETF, while Canary Capital seeks to launch the Canary HBAR ETF on Nasdaq. Both applications were submitted in February 2025 and are now entering a more advanced stage of regulatory scrutiny, known as proceedings to determine approval or disapproval. This phase enables the SEC to collect further data and stakeholder input, reflecting the agency’s methodical approach to crypto asset regulation.

Canary Capital’s proposed ETF would hold Hedera’s native token, HBAR, alongside cash reserves. The fund’s valuation is designed to track the CoinDesk Hedera USD CCIX 30-minute NY Rate, a benchmark aggregating prices from major cryptocurrency exchanges. Shares of the ETF would be issued or redeemed in blocks of 10,000, facilitating liquidity through both cash and in-kind transactions. This structure aims to provide investors with efficient market access to HBAR exposure while maintaining regulatory compliance. The SEC’s extended review highlights the complexities involved in approving crypto ETFs, particularly those linked to emerging blockchain projects like Hedera. Market participants are closely watching this process, as approval could set a precedent for future token-based ETFs and influence institutional adoption trends.

In light of the delays, applicants including Canary Capital and Grayscale have advocated for the SEC to implement a “first-to-file, first-to-approve” policy. This approach would prioritize ETF applications based on their submission dates, potentially accelerating the approval process and fostering a more competitive environment. While the SEC has yet to respond to this proposal, its adoption could significantly impact the timeline and strategic positioning of crypto ETF launches. Such a policy would particularly benefit Canary Capital, whose HBAR ETF was filed prior to Grayscale’s Polkadot Trust conversion. The industry views this push as a move toward greater transparency and fairness in regulatory decision-making, which could enhance investor confidence and market stability.

The SEC retains the authority to delay its decision up to four times before issuing a final ruling, with the next critical deadline set for September 9, 2025. This extended timeline provides additional opportunities for public commentary and regulatory analysis, ensuring that the SEC’s decision is grounded in comprehensive market understanding. Investors and stakeholders are advised to monitor developments closely, as the outcomes will likely influence the broader trajectory of crypto ETF approvals in the United States. The SEC’s decision to delay the approval of Polkadot and Hedera ETFs reflects a prudent regulatory stance amid the evolving cryptocurrency market. By extending the review period, the agency demonstrates its commitment to thorough evaluation and stakeholder engagement. While this postponement may test investor patience, it ultimately aims to foster a robust and transparent framework for crypto investment products. Market participants should stay informed and prepared for forthcoming updates as the SEC navigates this critical phase of crypto asset regulation.