SEC Hits Pause on Canary’s $LTC ETF—Kicks Decision to Public Opinion

Regulators punt the hot potato—again. The SEC delays its verdict on Canary’s proposed Litecoin ETF, opting instead to open the floor for public comments. Classic bureaucratic limbo.

Why it matters: Another crypto ETF in regulatory purgatory means more uncertainty for traders banking on institutional adoption. The SEC’s playbook? Stall, consult, repeat.

Between the lines: Wall Street’s old guard still squirms at crypto’s rise—funny how fast they’ll take fees on Bitcoin ETFs but balk at altcoins. The hypocrisy almost writes itself.

James Seyffart’s prediction becomes a reality

The SEC revealed in a statement that it has further delayed deciding on Canary Capital’s proposal for a spot Litecoin (LTC) exchange-traded fund (ETF). In light of this action, the agency is requesting an inquiry into whether Nasdaq’s proposal to list the ETF conforms with legal requirements. 

Canary Capital, which was founded by former Valkyrie Funds co-founder Steven McClurg last year, had submitted initial paperwork for the fund in October.

The decision has generated conversations within the crypto community. James Seyffart, a Bloomberg analyst with extensive experience, especially with Exchange-Traded Funds (ETFs), offered commentary on the subject. Based on Seyffart’s argument, he correctly predicted that the SEC would postpone making a decision on the Litecoin ETF, as it had done with other cryptocurrency ETFs so far, such as Franklin Templeton’s XRP ETF filing.

Moreover, according to Seyffart, Litecoin is the asset with the best chance of receiving early approval. Recently, the analyst predicted that there was a 90% chance that an LTC ETF would be approved this year, which gave the price of Litecoin a positive outlook. 

According to CoinMarketCap, Litecoin is currently down by 2.2% over 24 hours, trading hands for over $83.

Litecoin (LTC) is a proof-of-work cryptocurrency and the 25th biggest digital coin by market cap. The asset is a forked version of Bitcoin established in 2011 by ex-Google employee Charlie Lee.

The SEC has delayed Canary Capital’s Litecoin ETF just like other crypto ETF proposals

The SEC was set to decide on the proposed spot in Canary Capital’s Litecoin ETF on May 5. In the meantime, market observers had become more hopeful. In support of this, on Polymarket, approval odds had risen to their highest level since the middle of March.

In January, Nasdaq reportedly filed Form 19b-4, a proposed rule change, to list and trade Canary’s Litecoin ETF shares. The proposal was then made available for public comment in the Federal Register on February 4. This was the first day of the 45-day review period, which ended on March 21st.

However, the SEC decided to make this time frame longer by 45 days, setting a new 90-day deadline of May 5.

The statement said, “Accordingly, the Commission, under Section 19(b)(2) of the Act, 6 designates May 5, 2025, as the date by which the Commission shall either approve or disapprove or institute proceedings to determine whether to disapprove, the proposed rule change (File No. SR-NASDAQ-2025-005).” 

For other cryptocurrency ETF applications, the regulator has taken similar actions. The SEC delayed its decision on Bitwise’s Dogecoin (DOGE) proposal until June 15 and Franklin Templeton’s spot XRP (XRP) ETF until June 17. This was also the case with Grayscale’s Ethereum (ETH) staking ETF.

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