Market Awaits SEC Decision on Cryptocurrency ETP Amid Government Closure

According to PANews, Multicoin Capital's Chief Legal Officer, Greg Xethalis, recently commented on the confusion surrounding the U.S. Securities and Exchange Commission (SEC) and spot Exchange-Traded Products (ETP). The market is currently in anticipation of the government's reopening. The 19b-4 application deadlines for Litecoin and Solana were October 2 and October 10, respectively. Due to the introduction of the 'General Listing Standards,' these and related applications do not require separate consideration. Although technically effective, exchanges will decide whether to list them. Typically, an S-1 registration statement must undergo accelerated review by the SEC's Division of Corporation Finance to become effective. Submitted S-1 registration statements include a 'delaying amendment' to prevent automatic effectiveness. SEC staff responsible for reviewing these products are currently furloughed, slowing the review process until the government reopens. It is conservatively estimated that Solana's spot ETP will launch within a week after the government resumes operations. From a technical standpoint, issuers can withdraw the delaying amendment within 20 days of submitting the registration statement, allowing it to become effective. Some issuers and a few cryptocurrency ETPs have withdrawn the delaying amendment; however, this does not guarantee their launch around Halloween. Issuers must also submit Form 8-A, and exchanges need to file an 8a-12b notification to complete registration. In summary, once the U.S. government reopens or exchanges make a decision, multiple ETPs are expected to launch promptly. Therefore, the October 19b-4 application deadlines are not a concern, as these are self-regulatory organization rule deadlines, and the rule proposals have been approved. Applications for crypto assets that do not meet standards are still under review.