SEC Postpones Key Decisions on Ethereum ETF Staking and Altcoin Funds

The U.S. Securities and Exchange Commission (SEC) has announced further delays in its decisions regarding several significant cryptocurrency exchange-traded fund (ETF) proposals. The agency is extending its review periods for the inclusion of staking in BlackRock's spot Ethereum ETF, as well as for proposed Solana and XRP funds from Franklin Templeton. These postponements indicate a cautious approach by the SEC as it navigates the evolving landscape of digital asset investment products.

Key Takeaways

• The SEC has delayed decisions on adding staking to BlackRock's Ethereum ETF until October 30.

• Decisions on Franklin Templeton's proposed Solana and XRP ETFs have been pushed back to November 14.

• These delays are consistent with the SEC's recent pattern of postponing decisions on altcoin-related ETF applications.

Extended Review Periods for Crypto ETFs

The SEC has extended its deadline for a rule change request by Nasdaq concerning the addition of staking to BlackRock's iShares spot Ethereum ETF. The new deadline is October 30, a 45-day postponement from the original schedule. This follows similar delays for other Ethereum ETFs seeking to incorporate staking, including one from 21Shares.

Furthermore, the agency has deferred its decision on rule change filings by Cboe that would permit the listing of Franklin Templeton's proposed Solana and XRP ETFs. These decisions are now expected by November 14, marking a 60-day deferral.

Broader Trend of Delays

These latest postponements are part of a larger trend observed in recent weeks, where the SEC has delayed rulings on numerous altcoin fund proposals. For instance, the SEC recently put off a decision on Nasdaq's bid to list the Grayscale Hedera Trust, extending the deadline to November 12.

Last month also saw delays for applications related to spot XRP funds from various issuers, including Grayscale, CoinShares, and Bitwise, as well as a spot Dogecoin ETF from Grayscale and a spot Litecoin product from CoinShares. Similar delays were announced for Solana ETFs from Bitwise, 21Shares, and VanEck, and a Dogecoin fund from 21Shares.

Market Expectations and Analyst Views

Industry analysts suggest these delays are strategic, potentially aligning with the SEC's review of broader listing standards for crypto ETFs. Bloomberg Senior ETF Analyst Eric Balchunas noted that the SEC is likely waiting for generic listing standards to be finalized, which could streamline the approval process for future ETFs. He anticipates a potential "flood of ETFs" in the coming months after these standards are in place, with a high probability of approvals for Solana and XRP ETFs, and a strong likelihood for ETH staking to be included.

This approach allows the SEC to address a backlog of applications, which, according to Bloomberg Intelligence, numbered over 90 crypto ETF applications before the end of August. The agency's Division of Corporation Finance had previously indicated that certain blockchain staking activities might not be considered securities offerings, fueling interest in staking features for Ethereum ETFs.

Sources

• SEC Punts on BlackRock Ethereum ETF Staking, Franklin XRP and Solana Fund Decisions, Yahoo Finance.

• SEC delays decisions on staking for Ethereum ETFs, along with XRP and SOL funds, The Block.