The halls of government might be quiet, but the crypto world rarely sleeps. This week, we are seeing a curious development. Several new cryptocurrency exchange-traded funds are pushing ahead with their launches, even with a U.S. government shutdown in full swing.
- New cryptocurrency ETFs are launching despite the U.S. government shutdown, leveraging specific SEC guidance that allows firms to proceed without a “delaying amendment” on their S-1 filings.
- This expedited process requires S-1 filings to be final, as any changes will reset the 20-day clock, introducing a risk of shareholder lawsuits due to potential misstatements or omissions.
- Prior SEC approval of new listing standards by exchanges has streamlined the process, allowing ETFs to bypass the lengthy 19b-4 review, though issuers must still meet these standards and ensure their filings are precise.
It feels a bit like a secret handshake in a silent room. Among these expected newcomers are the Canary Litecoin ETF, the Canary HBAR ETF, and the Grayscale Solana Trust ETF. People close to the situation have shared these details. For many in the crypto space, this news offers a glimmer of forward motion during a period of regulatory uncertainty.
How is this possible, you ask? It boils down to some specific guidance from the SEC. They released this information on October 9, about a week into the shutdown. This guidance clarified how firms could still go public, even with many federal employees furloughed.
The key, it seems, is filing an S-1 registration statement without what is called a “delaying amendment.” Think of an S-1 as a company’s detailed public debut announcement. It tells everyone what the company is, what it does, and its financial health. Normally, a delaying amendment acts as a pause button, giving the SEC about 20 days to review comments and make sure everything is in order.
Without that pause, the ETF could go into effect after 20 days. This speeds things up considerably. But there is a catch, a rather important one. The S-1 filing must be absolutely final. Any changes, even small ones, restart that 20-day clock from scratch.
One person familiar with the process put it plainly. “If you do that, you can launch, but you’re taking a risk that the SEC might have comments that you did not clear through them, and then there might be things that are problematic with your S-1 that a shareholder can sue you over if there’s a misstatement or omission.”
It is a bold move. Firms confident in their paperwork are simply pressing forward. It shows a certain conviction, or perhaps a touch of impatience, in getting these products to market. For investors, an ETF offers an easier way to gain exposure to crypto assets without directly holding the coins themselves. This convenience often attracts a broader range of participants.
The Regulatory Tightrope
Before the government lights dimmed earlier this month, dozens of crypto ETFs were lined up, waiting for the SEC’s green light. The agency, however, has been running on a skeleton crew. Their shutdown plan means many staff members are furloughed, limiting what work can actually get done. This creates a bottleneck for many standard regulatory processes.
The SEC’s role is typically to protect investors and maintain fair, orderly, and efficient markets. This includes a thorough review of new financial products like ETFs. So, operating with limited staff means some of the usual checks and balances are either delayed or, in this specific case, bypassed by firms willing to take on more risk.
But here is another piece of the puzzle. Before the shutdown, the SEC had already approved new listing standards. These standards were proposed by three exchanges. They changed a rule governing the trading and listing of commodity-based trust shares. This sets out specific requirements for these shares to be listed on those exchanges.
This approval was a big deal. It means many crypto ETF applications could go live much faster. They would not need to go through the lengthy 19b-4 process. That process used to add much time to the launch timeline. Now, firms looking to launch without direct SEC sign-off just need to meet these new listing standards. It is a streamlined path, but one that still demands precision in filings.
We are already seeing the paperwork trickle in. Filings called Form 8-As have started appearing. These forms are essentially a notice to the SEC that a security is being registered for public trading. On Monday, Canary Capital filed two of these. One was for Litecoin, and another for HBAR. These 8-As essentially incorporate the S-1s, paving the way for listing on an exchange.
Then there was a moment of digital intrigue. Kyle Samani, a managing partner at Multicoin Capital, posted on X (formerly Twitter) about the launch of the Bitwise SOL Staking ETF. But the post vanished soon after. Bitwise itself chose not to comment when asked. It leaves you wondering what exactly happened there, a small mystery in a week of quiet regulatory maneuvers. It is a reminder that in crypto, announcements can sometimes be as fleeting as they are exciting.
Looking Ahead
So, should we expect a sudden wave of crypto ETFs hitting the market this week? Not necessarily, according to those in the know. It truly depends on how far along each issuer is in their process. Launching an ETF is a complex dance of legal, financial, and operational readiness. Even with a clearer path, not everyone is at the finish line.
“They’re [the SEC] not necessarily as far along with the other assets,” one person noted. This suggests that while some are ready, others might still be waiting for their ducks to line up. The SEC’s limited capacity means they cannot offer the usual level of pre-filing feedback or quick turnaround on comments for every single application. “So you might not see this done for other assets. We’ll see what happens.”
The situation highlights a fascinating tension. On one side, we have a government agency operating with reduced capacity. On the other, we have a crypto industry eager to push forward with new investment products. The approved listing standards provide a path, but the S-1 filing risk remains a significant consideration for those choosing to walk it. It speaks to the persistent drive within crypto. Even when the usual channels slow, creative solutions and a dose of confidence can open new doors.
This unique window, opened by a combination of prior regulatory changes and current government circumstances, offers a glimpse into the evolving relationship between traditional finance and digital assets. We will be watching closely to see which other assets, if any, follow Litecoin, HBAR, and Solana into this unique launch window. The quiet sound of progress, it seems, can still be heard, even during a shutdown.
