SEC Delays Litecoin ETF and CoinShares Spot XRP Decisions Again

SEC Delays Litecoin ETF and CoinShares Spot XRP in Latest Setback

The U.S. SEC has once again pushed back its decision on new crypto ETFs. This time, it involves CoinShares’ applications for two spot ETF based on XRP and Litecoin. Originally, a decision was expected by May 26, but the commission has now extended the review deadline to August 24. The agency is asking the public to submit more comments and counterarguments before taking any action.

Another Delay for XRP and Litecoin ETFs

CoinShares had filed to list its Litecoin ETF on the Nasdaq exchange and also proposed a separate XRP ETF. These filings approached their second-round deadlines, but the commission extended the decision for this time. The commission is looking for more insights from investors, industry experts, and the public.

This is a typical trend of delays by the commission on the matter of spot funds. In just the past week, the SEC also postponed decisions on Dogecoin and XRP ETF filings from Grayscale and 21Shares,and XRP Etf of Bitwise too. With Canary Capital and WisdomTree also nearing their exchnage traded funds deadlines, many expect further delays there as well.

Community Reaction Is Split

The crypto community is divided over these repeated delays. Some are frustrated and see the regulatory body's actions as another barrier for crypto progress in the U.S. Critics have even begun comparing the new SEC Chair Paul Atkins to former chair Gary Gensler, calling him “Gensler 2.0” for slowing down the procedures. They argue that it contradicts the promise of making the U.S. into a global crypto capital.

Many believe the delays are a smart move. Supporters say the SEC is just being careful and want solid rules in place before giving the green light. According to them, approving crypto products without clear laws could backfire. “Patience is key,” one investor noted, “Once the regulations are clear, the approvals will follow.”

Analysts Predict Approval Later This Year

Bloomberg ETF analyst James Seyffart said the SEC’s slow pace is expected. He believes the Commission might approve these ETFs, but only closer to the final deadline. While an early approval could happen around late June or early July, Seyffart says it’s more likely to arrive in the fourth quarter of 2025.

Source: James Seyffart

Prediction market Polymarket shows the public is slightly more optimistic. Litecoin ETFs have a 79% chance of getting approval before the end of the year, based on current market bets. 

Source: Polymarket

SEC Plays it Safe on Spot Crypto ETFs

This delay somewhere makes sense: the SEC is still considering the risk associated with these spot ETFs. It differs from futures-based ETFs, these funds typically hold the particular digital currency. There could be some concerns about market manipulation and safeguarding investors' trust, specifically in the market that still requires a robust regulatory framework. 

As the community is waiting for progress, the SEC is adopting a careful approach. The Commission is taking more time, gathering more information, and scrutinising more regulation, before the crypto products will be launched in the market. 

Ultimately, these delays showcase how complicated the process of ETFs approval is. The communities eye on the announcements to witness if in 2025 these pending funds will be launched.