Canary Capital Litecoin ETF Delay Amid US Government Shutdown

Litecoin ETF Delay: SEC Silence and US Government Shutdown Spark Doubt

Can the U.S. government shutdown derail the long-awaited Litecoin ETF? The crypto community was caught off guard this week as the U.S. Securities and Exchange Commission (SEC) missed its October 2 deadline to decide on Canary Capital’s spot Litecoin ETF proposal. No explanation was issued publicly, leaving investors speculating about the cause of the delay.

The development comes at a critical time when optimism around crypto exchange-traded funds has surged. Just days earlier, Litecoin rallied more than 13.6% on rising approval hopes. But with the SEC staying silent and the government partially shut down, the mood has shifted from excitement to uncertainty.

Regulatory Shift Adds New Uncertainty to Timeline

Earlier this year, the U.S. Securities and Exchange Commission directed firms to withdraw their 19b-4 filings—previously used for exchange rule changes—and refile under S-1 registration statements. Following this instruction, Canary Capital withdrew its 19b-4 application on September 25, changing the procedural timeline.

Eleanor Terrett explained that since the generic listing standard went into effect, “the deadlines technically no longer matter.” Bloomberg analyst James Seyffart echoed this, noting that while the old dates are irrelevant now, the process itself has become more unpredictable.

“The US government shutdown really throws a wrench into things,” Seyffart said, highlighting how both the regulatory shift and limited SEC staffing are delaying the Litecoin ETF’s review.

Source: X

Government Shutdown Slows SEC Operations

In August, the SEC had already stated that during government shutdown, it would not review or approve new financial products, including exchange-traded funds. While the agency remains operational with a skeleton crew, most reviews are paused or slowed significantly.

Terrett added that the SEC still needs to sign off on the S-1 for Canary’s Litecoin ETF, but “it’s unclear what remaining staff is working or what their priorities are at the moment.” She also revealed that the SEC is unable to respond to many press inquiries due to the shutdown.

Source: X

This operational freeze has left several ETF proposals hanging, and it is now one of them.

Litecoin Price Dips as Investors React to the News

The market responded swiftly. LTC, which had surged earlier in anticipation of approval, fell over 2% in 24 hours, dropping from $122 to $116.86. At the time of writing, LTC’s market cap stood at $8.92 billion with $1.12 billion in 24-hour trading volume, reflecting the immediate impact of the regulatory delay.

Source: CoinMarketCap

When Could Litecoin ETF Finally Get the Green Light?

Despite the temporary setback, market confidence remains strong. Data from Polymarket shows a 97% probability that it will be approved by December 31, 2025—a significant rise from 45–50% at the start of the year. Analysts expect that once the U.S. government reopens, the SEC will resume reviews, potentially fast-tracking the pending Canary Capital Litecoin ETF application.

Source: Polymarket

This optimism is aligned with the trajectory witnessed for Bitcoin and Ethereum ETFs, which also witnessed bureaucratic delays before receiving final approvals.

Conclusion

The SEC's slowness to release the LTC ETF is representative of how regulatory realignments and political justifications can influence crypto timelines. Although the deadline miss spurred near-term price movements, sentiment throughout the market is that this is a timeout, not a rejection. When the government returns to full speed, it can reinstitute its momentum—presaging 2025 as a potential benchmark year for LTC onboarding institutional.

Disclaimer: This is for educational purposes only. Always research on your own before making any crypto investment.