XRP News Today: Regulators Stall as SUI ETF Waits in the Shadows of Uncertainty

The U.S. Securities and Exchange Commission (SEC) has delayed its decision on the approval of the 21Shares Physical SUI ETF, a move that represents a significant setback for investors seeking exposure to the SUI token. The ETF, which aims to provide direct exposure to the SUI blockchain asset, has been under review as part of the SEC’s broader scrutiny of cryptocurrency-related investment products. This delay highlights the agency’s cautious approach to approving spot ETFs for altcoins, particularly as it navigates complex issues such as custody, market manipulation risks, and investor protection.

The SEC’s decision to extend the review period underscores the regulatory hurdles facing crypto ETF issuers. While the agency has granted approval for spot Bitcoin and Ethereum ETFs, the application process for altcoin ETFs has proven more challenging. In recent months, the SEC has delayed decisions for multiple altcoin ETF proposals, including those for Solana, XRP, and Litecoin. These delays have raised concerns among asset managers and investors who view the SUI ETF as part of a broader trend toward diversifying crypto exposure.

The 21Shares Physical SUI ETF is one of several spot ETFs being considered by the SEC. The company has previously filed for ETFs related to Dogecoin and XRP, and it is part of a growing number of firms pushing for broader regulatory acceptance of altcoin-backed products. However, the SEC has not signaled a shift in its approach to altcoin ETFs. Instead, it has focused on refining disclosure requirements and ensuring robust custody and staking mechanisms, particularly for tokens that operate on proof-of-stake or delegated proof-of-stake networks.

Industry analysts have noted that the SEC’s delays may be a strategic move to allow for more standardized review processes. In July 2025, the agency launched “Project Crypto,” a framework aimed at modernizing securities laws for on-chain innovation. This initiative is expected to streamline the evaluation of new crypto ETFs by introducing a generic listing model that could reduce approval timelines. However, for the SUI ETF and similar products, the absence of a clear regulatory timeline remains a challenge.

Market participants are watching closely as the SEC continues to evaluate crypto ETF applications. As of August 2025, the agency was reviewing over 90 ETF proposals, including those for altcoins like Solana, XRP, and Cardano. The delays have prompted criticism from some industry players, who argue that the SEC’s inconsistent and prolonged review process is stifling innovation. In June 2025, firms such as VanEck, 21Shares, and Canary Capital publicly called for the agency to return to a “first-to-file, first-to-approve” system, emphasizing that the current approach may hinder the development of a competitive and transparent crypto ETF market.

The outcome of the SUI ETF review could have broader implications for the crypto asset management industry. If approved, the product could serve as a precedent for future spot ETFs for other altcoins, potentially accelerating the introduction of similar products. Conversely, a rejection or further delay could reinforce the perception that the SEC remains skeptical of altcoin-backed investment vehicles, at least in the current regulatory climate. Investors seeking exposure to SUI may need to explore alternative strategies in the interim, including direct token purchases or other structured products.

The SEC’s broader regulatory agenda also plays a role in the ETF approval process. With new rules around in-kind creations and redemptions and the potential adoption of generic listing standards, the agency appears to be working toward a more systematic approach. However, for the SUI ETF, these developments may not translate into immediate approval. Given the SEC’s track record with altcoin ETFs, most observers expect a decision to be made by late 2025, although the exact timing remains uncertain.

Source:

[1] Crypto ETFs Watchlist: Key Filings, Players & Status Updates (https://www.ccn.com/education/crypto/crypto-etf-watchlist-filings-players-updates/)