Key Takeaways
Canary Capital’s LTC ETF might be the first spot crypto ETF approved by the SEC in 2025.
The CFTC classifies LTC as a commodity, differentiating it from other digital assets facing regulatory challenges.
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Canary Capital’s Litecoin ETF is well-positioned to become the first spot crypto ETF approved by the SEC under the incoming Trump administration, given Litecoin’s commodity status, according to Bloomberg ETF analyst Eric Balchunas.
Following Canary Capital’s amended S-1 filing yesterday, Nasdaq submitted a 19b-4 form to the SEC on Thursday, formally beginning the review process for the Canary LTC ETF. The SEC now has 45 days from Federal Register publication to approve or deny the listing, with a possible 45-day extension.
According to Balchunas, the Litecoin ETF application has met all the necessary requirements and conditions for approval.
“LTC ETF now has all the boxes checked. The first alt coin ETF of 2025 is about to be on the clock. I don’t see any reason why this would be withdrawn either given SEC gave comments on the S-1, LTC is seen as commodity and there’s new SEC sheriff in town,” Balchunas wrote on X on Thursday.
Balchunas stated Wednesday that the SEC had provided feedback on Canary Capital’s S-1 filing for their proposed Litecoin ETF. This prompted the firm to submit the amendment.
James Seyffart, Balchunas’ fellow Bloomberg ETF analyst, noted that “A 19b-4 would actually start the potential approval/denial clock.”
Canary Capital filed its Litecoin ETF S-1 statement with the SEC in October 2023. The amended filing names US Bancorp Fund Services as the ETF administrator, with Coinbase Custody Trust and BitGo serving as custodians for the ETF’s Litecoin holdings.
CFTC classifies Litecoin as a commodity
The CFTC labeled LTC as a commodity in its lawsuit against crypto exchange KuCoin. This classification exempts LTC from the SEC’s securities regulations. In a filing from March 2024, the CFTC reinforced Litecoin’s commodity status.
The SEC, however, has not made any definitive public statements categorizing Litecoin as a security or a non-security. Unlike LTC, Ripple and Solana have faced explicit SEC scrutiny. Ripple is still involved in ongoing litigation, with the SEC arguing that its native token, XRP, constitutes a security. Similarly, the SEC classified Solana’s SOL token as a security in cases against Binance and Coinbase, and these legal disputes remain unresolved.
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