Key Takeaways
Canary Capital’s Litecoin ETF might be the first spot crypto ETF approved by the SEC in 2025.
The CFTC classifies Litecoin as a commodity, differentiating it from other digital assets facing regulatory challenges.
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Canary Capital’s Litecoin ETF is well-positioned to become the first spot crypto ETF approved by the SEC under the incoming Trump administration, given Litecoin’s commodity status, according to Bloomberg ETF analyst Eric Balchunas.
Following Canary Capital’s amended S-1 filing yesterday, Nasdaq submitted a 19b-4 form to the SEC on Thursday, formally beginning the review process for the Canary Litecoin ETF. The SEC now has 45 days from Federal Register publication to approve or deny the listing, with a possible 45-day extension.
According to Balchunas, the Litecoin ETF application has met all the necessary requirements and conditions for approval.
“Litecoin ETF now has all the boxes checked. The first alt coin ETF of 2025 is about to be on the clock. I don’t see any reason why this would be withdrawn either given SEC gave comments on the S-1, Litecoin is seen as commodity and there’s new SEC sheriff in town,” Balchunas wrote on X on Thursday.
Balchunas stated Wednesday that the SEC had provided feedback on Canary Capital’s S-1 filing for their proposed Litecoin ETF. This prompted the firm to submit the amendment.
James Seyffart, Balchunas’ fellow Bloomberg ETF analyst, noted that “A 19b-4 would actually start the potential approval/denial clock.”
Canary Capital filed its Litecoin ETF S-1 statement with the SEC in October 2023. The amended filing names US Bancorp Fund Services as the ETF administrator, with Coinbase Custody Trust and BitGo serving as custodians for the ETF’s Litecoin holdings.
CFTC classifies Litecoin as a commodity
The CFTC labeled Litecoin as a commodity in its lawsuit against crypto exchange KuCoin, thereby exempting it from the SEC’s securities regulations.
The SEC has not taken any official action or made any public pronouncements that definitively categorize Litecoin as either a security or not a security.
Unlike Litecoin, Ripple and Solana have faced explicit SEC scrutiny. Ripple continues to be engaged in ongoing litigation with the SEC, which maintains that its native token, XRP, constitutes a security.
The SEC has also classified Solana’s SOL token as a security in separate cases against Binance and Coinbase. These legal disputes remain unresolved.
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