XRP and DOGE ETFs Undergo SEC Review Delay While Public Feedback is Requested

The US Securities and Exchange Commission (SEC) has decided to prolong its examination period for proposed spot cryptocurrency exchange-traded funds (ETFs) related to XRP and DOGE.

This follows a pause on decisions initially scheduled for May 21 and 22, with the Commission now soliciting input from the public regarding these proposals.

Decision on XRP and DOGE ETFs

The postponement affects three trusts: the 21Shares Core XRP Trust, Grayscale XRP Trust, and Grayscale Dogecoin Trust. These funds are designed to provide investors with access to their respective cryptocurrencies through ETF shares that are exclusively backed by XRP or DOGE, utilizing index tracking and custodial services from recognized industry partners such as Coinbase Custody and CoinDesk Indices.

The SEC has clarified that this delay should not be interpreted as a signal leaning towards approval or rejection. Instead, the Commission is inviting public feedback to better determine if these proposals align with the standards regarding investor protection and market integrity established in the Exchange Act.

In its filings, the agency indicated,

“Initiating proceedings is appropriate at this point given the legal and policy concerns raised by the proposed rule change. This initiation does not imply that the Commission has finalized any conclusions on the issues at hand. The Commission is encouraging interested parties to submit comments on the proposed rule change.”

Additionally, the agency has also deferred a decision on Bitwise’s request to incorporate staking in its Ethereum ETF, continuing a pattern of extended review periods in light of the growing number of crypto-related applications.

Routine Delays in ETF Approvals

He mentioned that the securities regulator typically utilizes the entire allotted timeframe to assess 19b-4 filings, suggesting that October would be a more realistic timeframe for concluding decisions. Seyffart further stated that any approvals granted before late June or early July would be seen as out of the ordinary, irrespective of the SEC’s current position on cryptocurrency. From his perspective, prompt actions, rather than delays, would represent a notable shift from typical regulatory practices.

Seyffart even suggested that the likelihood of the Litecoin ETF receiving approval first is higher compared to the other cryptocurrency ETFs.