October was supposed to be the month. We all had our calendars marked, anticipating a flurry of new crypto exchange-traded funds, or ETFs, hitting the U.S. market. Deadlines for the Securities and Exchange Commission, the SEC, to give its nod or shake its head were stacked up like dominoes. Then, as often happens in Washington, the government shut its doors. The entire process froze solid. Those deadlines? They suddenly didn’t matter much at all.
- The U.S. government shutdown temporarily halted the approval process for new crypto ETFs, pushing anticipated launches from October to November. Issuers are now utilizing a procedural loophole to launch funds without direct SEC approval.
- Four crypto ETFs from Canary Capital, Bitwise, and Grayscale have already begun trading by leveraging a “no delaying amendment” clause in their S-1 filings, which allows them to become effective automatically after 20 days if the SEC does not intervene.
- This workaround, while effective for some, has limitations, as certain applications may still require direct SEC engagement, especially those with less prior interaction with the agency. The success of this method could lead to more crypto ETFs, including a potential XRP fund, launching soon.
Now, it looks like November is stepping up to take October’s place. It’s a bit of a twist, really. Issuers, those companies wanting to launch these funds, are finding a clever way around the regulatory gridlock. They are using a procedural path that doesn’t require an active, signed-off approval from the SEC. It’s a quiet kind of progress, almost happening by default.
We’ve already seen this approach work. Just this week, four crypto ETFs began trading. Two came from Canary Capital, one from Bitwise, and another from Grayscale. They started trading even with the regulatory gears grinding to a halt. It’s a testament to ingenuity, or perhaps, a sign of just how much these firms want to get these products to market.
The trick involves filing updated S-1 registration statements. These are the prospectuses, the detailed documents that tell investors what they need to know. Crucially, these new filings include specific language: “no delaying amendment.” Under U.S. securities law, such filings automatically become effective after 20 days. That is, unless the SEC steps in to stop them or asks for changes. For those four ETFs that went live, the SEC simply didn’t act. They got the green light by not getting a red one.
This success has certainly stirred the pot. We’re seeing a fresh wave of similar filings. Just the other day, Fidelity submitted an updated S-1 for its spot Solana ETF. Canary Capital followed suit with an XRP ETF filing. If the SEC keeps its current hands-off approach, we could see the very first XRP fund trading as early as November 13. That’s a date many in the crypto space are watching closely.
It’s a fascinating turn of events. For years, the crypto community has pushed for spot ETFs. These funds hold the actual underlying cryptocurrency, rather than just futures contracts. They are seen as a more direct and accessible way for everyday investors to gain exposure to digital assets. The SEC, however, has been notoriously cautious, citing concerns about market manipulation and investor protection.
The journey to get these ETFs approved has been a long one. It’s been filled with applications, rejections, and appeals. Many saw the SEC’s stance as overly conservative, especially when other countries had already embraced similar products. This procedural workaround, born out of a government shutdown, feels almost ironic. It’s a case of inaction leading to action, in a way.
But there are limits to this quiet workaround. It’s not a magic wand. The SEC has, for example, already reviewed filings related to Solana, Hedera, and Litecoin ETFs in the past. They’ve had some engagement there. The XRP application, however, hasn’t seen as much back-and-forth with the agency. This lack of prior engagement could be a sticking point. It might prompt the SEC to actually step in and halt an automatic approval.
James Seyffart, an ETF analyst at Bloomberg Intelligence, weighed in on this very point. He thinks we could see a good number of funds launch next month. He believes this could happen whether the government reopens or not. But he also points to a key distinction. Some funds have simply not received any feedback from the SEC on their S-1 prospectuses. These, he suggests, might not be able to launch without the SEC actually getting back to work and engaging.
“So yes a bunch will likely launch next month but there are some that are simply unlikely to launch without the government reopening,” Seyffart said. It’s a clear reminder that while this procedural path is clever, it isn’t a universal solution. Some applications still need that direct regulatory interaction, that back-and-forth dialogue.
For investors, this shift marks a truly new phase. The years-long quest to bring crypto ETFs to U.S. markets has taken an unexpected detour. We’re no longer just waiting for the SEC’s formal blessing, that explicit “yes.” Instead, issuers are using the mechanics of the system, the very rules designed to govern these filings, to move forward. It’s a subtle but significant change in strategy.
Think of it like this: you’re waiting for a permit to build a new porch. You’ve submitted all your paperwork. Normally, you wait for the city official to call you, review it, and then approve it. But in this scenario, if the official doesn’t call you within a set timeframe, the permit is automatically granted. It’s a bit of a regulatory default, and it certainly speeds things up if the official is, say, on an extended leave.
The significance of a spot XRP ETF, should it launch, is also worth noting. XRP has had its own long and winding road with regulators. A successful launch would not only open a new avenue for investors but also signal a growing acceptance, however quiet, of a wider range of digital assets within traditional finance. It’s a small step, perhaps, but a meaningful one for the asset.
The market’s readiness for these products has rarely been in question. There’s clear demand from investors who want simpler, regulated access to crypto. The real question has always been about the regulatory environment. This current situation, where the SEC’s silence is effectively consent, is a peculiar answer to that question.
Whether this momentum carries through November and beyond remains to be seen. It may depend less on how eager the market is, and more on whether the government gets back to its regular operations. The dance between innovation and regulation continues, sometimes in the most unexpected ways.
