U.S. Crypto ETFs May See New Launches in November as Issuers Bypass SEC Delays

The anticipated launch of crypto exchange-traded funds (ETFs) in the U.S. market, initially expected in October, was put on hold due to the government shutdown, which froze the Securities and Exchange Commission's (SEC) decision-making process. However, November may now become the pivotal month for these launches. Several issuers have adopted a procedural strategy that circumvents the need for explicit SEC approval. This approach, which involves filing updated S-1 registration statements with 'no delaying amendment' language, allows these filings to become effective automatically after 20 days unless the SEC intervenes. This tactic has already enabled four crypto ETFs to commence trading, despite the regulatory impasse. The success of this workaround has prompted a flurry of new filings, including those from Fidelity for a spot Solana ETF and from Canary Capital for an XRP ETF. If the SEC maintains its current stance and does not obstruct the process, the market may witness the debut of its first XRP fund as early as November 13. Nevertheless, the efficacy of this strategy is limited, particularly for funds that have not yet received feedback from the SEC on their prospectuses. According to James Seyffart, an ETF analyst at Bloomberg Intelligence, while it is possible that several funds will launch in November regardless of the government's status, others may be unable to proceed without the SEC's input. This shift signifies a new era in the prolonged endeavor to introduce crypto ETFs to the U.S. market, where issuers are leveraging procedural mechanisms to advance, rather than awaiting the SEC's formal endorsement.