SEC Postpones Decisions on New ETFs
The U.S. Securities and Exchange Commission (SEC) has postponed its decisions regarding proposed changes to regulations that would permit the trading of two exchange-traded funds (ETFs): one by 21Shares that tracks XRP, and another by Grayscale that is based on Dogecoin prices. According to filings released on Tuesday, the SEC intends to conduct additional reviews to ascertain whether these ETFs meet the regulatory standards designed to prevent fraud and ensure investor protection.
Background on ETF Requests
The requests for these rule modifications were initially submitted to the SEC earlier this year by major exchanges, Cboe and the New York Stock Exchange (NYSE), where the two funds would potentially be traded. It is important to note that the current delays in decision-making do not imply whether or not the SEC will grant approval for the ETFs, as clarified in the filings.
Broader Trends and Impact on Altcoin Funds
This latest postponement is part of a broader trend affecting altcoin-based funds, with several issuers facing similar delays in recent months. On Monday, the SEC also announced extensions for its decisions on other proposals for ETFs from firms such as 21Shares, Bitwise, VanEck, and Canary Capital that aim to track the market price of Solana, highlighting an ongoing uncertainty in the regulatory environment for digital asset securities.
The surge of interest in altcoin funds follows the successful introduction of spot Bitcoin ETFs and the less favorable reception of Ethereum-related funds that were launched last year. Both 21Shares and Grayscale have received SEC approvals for their Bitcoin and Ethereum offerings in the U.S., demonstrating a mix of regulatory acceptance and hesitation.
New Crypto ETF Applications
Moreover, several prominent asset management companies, including Bitwise, Franklin Templeton, and CoinShares, are also in the process of applying for new crypto ETFs that would provide investors with access to various digital assets such as Litecoin, Cardano, SUI, and Pengu.
Significance of XRP and Dogecoin ETFs
21Shares previously filed a registration statement with the SEC last year to create an XRP ETF, which is significant given that XRP ranks as the fourth largest cryptocurrency by market capitalization. This cryptocurrency is the product of fintech company Ripple, which specializes in accelerating international transactions.
Meanwhile, Grayscale, a crypto asset manager headquartered in Stamford, Connecticut, initiated plans in January to transition its Dogecoin Trust into an ETF. Dogecoin is notably the eighth largest cryptocurrency by market cap and was initially introduced as a meme.
The Success of Bitcoin-Related Funds
Bitcoin-related funds have maintained a remarkable track record, achieving over $126 billion in assets under management, making them the most successful in the 32-year history of ETFs, according to CoinGlass data.
