Decision on Canary Litecoin ETF Pushed Back by SEC as Shutdown Persists
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The U.S. Securities and Exchange Commission missed its October 2 deadline for a decision on Canary Capital’s spot Litecoin exchange-traded fund. This inaction coincides with the federal government shutdown, which forced the SEC to suspend non-essential operations, thereby halting progress on all pending reviews.
Next Row of Crypto ETF Approvals at Risk of Being Pushed Back
The fund carried weight in the industry as the first proposed altcoin ETF under the Securities Exchange Act of 1934; the Canary Litecoin ETF represented a potential milestone for diversifying crypto investment beyond Bitcoin and Ethereum.
The fund’s current limbo, however, deepens the uncertainty, straining the entire crypto ETF market.
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The SEC suspended most activities on October 1 after Congress failed to pass a funding bill. Employees were instructed to secure files and suspend non-essential functions.
The scale of the freeze is significant. Bloomberg analyst James Seyffart reported that 92 crypto ETF filings are waiting for decisions, with 16 facing deadlines this month alone.
If the shutdown drags on, these applications could also remain stuck. In effect, the agency’s freeze puts another layer of uncertainty on an approval process that has already been slow and inconsistent.
The missed Canary decision has raised another issue: whether deadlines still hold weight in the SEC’s new framework for crypto ETFs.
On September 17, the SEC approved new listing standards designed to streamline the approval process, shifting away from the strict calendar tied to 19b-4 filings.
New Listing Standards Shift the Timeline
Under the old structure, exchanges submitted 19b-4 filings that imposed a fixed review timeline of up to 270 days.
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The updated framework shortens that period to as little as 75 days and changes the focus to S-1 registration statements.
The SEC has even asked issuers to withdraw their 19b-4 filings, altering the entire timeline for decisions. The Canary Litecoin ETF 19b-4 application has been withdrawn at the agency’s direct request.
This shift means many of the dates the market once tracked may no longer be relevant. Bloomberg analyst James Seyffart noted that the focus is now solely on S-1 reviews, allowing for more flexible deadlines.
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Crypto reporter Eleanor Terrett expanded on the point, stressing that with issuers pulling their 19b-4s, binding deadlines effectively disappear.
That flexibility grows even more unpredictable during a government shutdown, when staff levels are already reduced.
For now, issuers and investors alike must wait, with little clarity on when reviews will restart.
The fate of the Canary Litecoin ETF and other pending products may determine whether the new framework accelerates approvals or merely creates new uncertainty.
