SEC Kicks Canary’s Litecoin ETF Can Down the Road—Again

Regulators hit pause on the hotly anticipated spot Litecoin ETF, opting for more bureaucratic rope-a-dope instead of decisive action. Public comments now open—because nothing moves crypto faster than government paperwork.

Wall Street’s favorite stalling tactic: When in doubt, ask for feedback. The SEC’s latest delay gives traders déjà vu—another 45-day window to debate an asset they still pretend not to understand.

Meanwhile, Litecoin holders shrug. The ’digital silver’ keeps chugging along, ETF or not, while regulators play catch-up. Classic finance: slow-walking innovation until it’s too late to matter.

SEC Extends Review Period

Canary Funds, a Nashville-based asset manager founded last year by Steven McClurg — a former Valkyrie Funds co-founder — filed its initial application for the Canary Litecoin Trust in October 2024. The proposed product would offer direct exposure to Litecoin (LTC), a cryptocurrency with a market capitalization of approximately $6.6 billion. Like Bitcoin, Litecoin operates on an open-source blockchain, having been developed from Bitcoin’s original codebase.

Opening Floor For Public Feedback

The SEC confirmed on the day of its deadline that it would not be issuing an immediate decision. Instead, the agency has opened a period for public feedback to assess whether the proposed ETF meets regulatory standards designed to deter market manipulation and protect investors.

The agency claimed, 

“In particular, the Commission seeks comment on whether the proposal to list and trade Shares of the Trust, which would hold LTC, is designed to prevent fraudulent and manipulative acts and practices or raises any new or novel concerns not previously contemplated by the Commission.”

Growing Interest in Crypto ETFs

The postponement follows a recent wave of delays for several other altcoin ETF applications, including those tied to XRP, Hedera, and Dogecoin. Until now, the Canary Litecoin ETF had remained untouched, leading to speculation among market watchers that the regulator might be preparing a different course for this application.

According to Bloomberg Intelligence ETF analyst James Seyffart, a Litecoin ETF stands among the most likely candidates for early approval under the SEC’s new leadership. In a post on X, Seyffart remarked that while a delay was anticipated, Litecoin’s positioning could give it an advantage in securing a future greenlight.

Data from The Block indicates that several issuers — including Grayscale and CoinShares — are actively competing to launch a Litecoin ETF, reflecting intensified interest from institutional investors in expanding beyond Bitcoin and Ethereum ETFs.

Shifting Regulatory Landscape

The regulatory environment has shifted following the election of President Donald Trump, whose administration has signaled a more accommodating stance toward digital assets. New SEC Chair Paul Atkins, appointed in April 2025, has voiced support for digital asset innovation, recently stating his belief in the “huge benefits” of cryptocurrencies. The Commission has since dropped several enforcement actions against crypto firms and initiated public roundtables to discuss crypto market oversight.

Issuers and investors alike are closely monitoring how the SEC, under Atkins’ leadership, will navigate the next wave of ETF applications, including those tied to Litecoin and other altcoins. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice