SEC Delays Decision on Canary Capital’s Proposed Litecoin ETF

The U.S. Securities and Exchange Commission (SEC) has postponed its decision on Canary Capital’s proposed spot Litecoin (LTC) exchange-traded fund (ETF), dashing hopes for quicker approval. This delay follows recent postponements for other crypto ETF applications, including XRP, Dogecoin, and Hedera.

Speculation had been building that the SEC might treat the Litecoin ETF differently, especially since the agency had not initially delayed it alongside others. However, on the May 6 deadline, the SEC issued a formal delay and called for public comments, particularly on whether the fund’s structure can effectively prevent fraud and manipulation.

Canary Capital, founded in 2023 by Steven McClurg—former co-founder of Valkyrie Funds—first submitted its proposal in October. The ETF would track the price of Litecoin, a Bitcoin-based open-source blockchain asset with a market cap of around $6.6 billion.

According to the SEC’s filing, the agency is seeking insight on whether listing and trading shares of the trust holding LTC introduces any novel regulatory risks. Industry experts had speculated that Litecoin would be the next digital asset to gain ETF approval, following reports that the SEC had responded to Canary’s application earlier this year.

The decision is among the first ETF-related actions under newly appointed SEC Chair Paul Atkins, who replaced Gary Gensler in April. Analysts, including Bloomberg’s Eric Balchunas, view Atkins’ leadership as a potentially pivotal shift for crypto ETF regulation.

The delay underscores the SEC’s cautious approach to crypto investment products, as it continues to scrutinize proposals amid rising investor demand for regulated exposure to digital assets like Litecoin.