In a move that many industry observers anticipated, the U.S. Securities and Exchange Commission (SEC) has postponed its verdict on Bitwise’s proposal to incorporate Ether staking into its exchange-traded fund (ETF) and Grayscale’s bid for an XRP ETF. This decision, announced on May 20, extends the evaluation period by 45 days, allowing the SEC more time to delve into the complexities of the proposals.
A Strategic Pause
The SEC’s decision to defer isn’t surprising to those familiar with the agency’s modus operandi. According to James Seyffart, a Bloomberg ETF analyst with a keen eye on regulatory processes, the delay was “expected because the SEC typically takes the full time to respond to a 19b-4 filing.” This procedural step is part and parcel of the SEC’s rigorous approach to ensuring compliance with regulatory standards.
Seyffart shared his insights on X, noting that “almost all of these filings have final due dates in October,” suggesting that an earlier decision would be unusual. He emphasized that despite a seemingly more crypto-friendly stance post-Gary Gensler, “there’s no conspiracy here.” The SEC’s cautious pace is not an anomaly but a norm in its regulatory framework. For a deeper dive into the regulatory implications, see our coverage of the SEC’s latest guidance.
Ripple Effects on the Crypto Landscape
The SEC’s deferral also affects Grayscale’s proposal for an XRP tracking ETF and Bitwise’s Solana ETF, as the agency opens the floor for public comments and embarks on further analysis. This procedural step underscores the intricate review process ETFs must undergo before potentially gaining approval. As explored in our recent coverage of Crypto Coalition’s stance on staking, the debate over staking’s classification continues to be a pivotal issue.
Seyffart hinted at broader expectations, stating, “Delays on other spot crypto ETF bids are also expected.” He mentioned that while Litecoin ETFs might have a “higher likelihood” of early approval, any such decision likely won’t occur until late June or July. More realistically, Seyffart suggests, approvals may not trickle in until early fourth quarter 2025.
SEC Navigates a Wave of Applications
The SEC is currently navigating a torrent of crypto ETF applications, with several deadlines looming in June. Grayscale’s Polkadot tracking ETF decision is due by June 11, and 21Shares’ Polkadot ETF by June 24. These dates mark significant moments for the crypto investment community, eager to see how the SEC will adjudicate these burgeoning financial instruments.
Historically, the SEC’s relationship with crypto has been tumultuous. Former SEC Chair Gary Gensler’s tenure was characterized by stringent regulatory actions, with over 100 crypto-related cases. However, with Gensler’s departure in January, the regulatory climate appears to have mellowed. Several firms, including crypto exchange Gemini and trading firm Cumberland DRW, have seen legal actions against them dismissed, signaling a potential shift in regulatory philosophy.
The Road Ahead
As the SEC continues to wade through a sea of crypto ETF filings, the industry remains in a state of watchful anticipation. The question remains: will the agency’s newfound openness translate into tangible approvals, or will the bureaucratic gears continue to grind slowly?
The delays raise interesting possibilities for the future of crypto ETFs and the broader cryptocurrency market. With key decisions pushed to later in the year, the industry is left to speculate on which assets might first break through the regulatory barrier.
What does this mean for investors and the crypto community at large? Only time will tell. But as the SEC methodically processes each application, the crypto world watches closely, hopeful for a regulatory environment that might finally accommodate the growing demand for innovative financial products.
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This article is based on: SEC delays decision on Ether staking and XRP ETFs, as analysts expected
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
