US SEC delays ruling on Grayscale Solana and Litecoin ETFs, citing need for more investor protection and market transparency review.
The Grayscale Spot Solana and Litecoin ETFs have been subject to a postponement by the United States Securities and Exchange Commission (SEC). The agency stated that additional time is required to evaluate whether these filings adhere to the requisite standards for market transparency and investor protection. Grayscale’s endeavors to list spot cryptocurrency ETFs that would be traded on the NYSE Arca exchange are impacted by this delay.
Simultaneously, the US Securities and Exchange Commission (SEC) initiated public comment periods for additional crypto-related proposals, such as BlackRock’s Bitcoin ETF redemption model.
The review period for Grayscale SOL and LTC ETFs has been extended by the US SEC
The review procedure for the proposed Grayscale Solana Trust will be extended by the US Securities and Exchange Commission (SEC). The agency assesses how much the fund adheres to the Securities Exchange Act of 1934. If approved, the ETF would enable the public trading of Solana-backed shares through traditional investment accounts.
The Grayscale Litecoin Trust is subject to the same decision. The SEC stated that additional time is required to ascertain whether the Litecoin ETF filing satisfies the necessary legal and market conditions. Grayscale’s filings are now subject to an extended timeline, which may involve multiple phases before the SEC’s final decision.
The commission subsequently initiated proceedings to ascertain whether to approve or deny the proposed rule change, as indicated in the official filing. Polymarket, a cryptocurrency prediction market, has assigned Grayscale’s Solana ETF an 82% likelihood of approval by December 31, 2025. The probability of the Litecoin ETF following closely is 80%.
The Redemption Proposal for BlackRock’s Bitcoin ETF
In addition to Grayscale’s delays, the US SEC has initiated the public comment phase for BlackRock’s proposed rule change to its iShares Bitcoin Trust. The proposed amendment would permit in-kind redemptions, enabling authorized participants to exchange ETF shares directly for Bitcoin rather than utilizing currency.
This modification would represent a departure from the initial cash-only model approved earlier this year. The SEC will be able to ascertain whether this redemption mechanism provides adequate protections for investors and preserves the orderly function of the market by considering public comments.
This delay results from BlackRock’s filing for an amendment to its spot Ethereum ETF, enabling an in-kind creation and redemption process.
US SEC’s Cautious Approach Under New Leadership
The SEC has enhanced its communication with the public and the digital asset industry under the leadership of new Chair Paul Atkins. In its management of financial products related to cryptocurrency, the agency has prioritized transparency and adherence to established investor protection regulations.
The spot Dogecoin ETF registration submitted by 21Shares has been acknowledged by the US SEC, despite the recent delays. This action positions the application on the agency’s timeline, which permits the agency to approve or reject the product within 240 days.
Concurrently, the SEC has dismissed numerous enforcement cases, including the Ripple lawsuit, and has increased the utilization of public comment periods and roundtables in recent months. These actions indicate a more extensive regulatory reevaluation under the current administration.