The U.S. Securities and Exchange Commission (SEC) has postponed their review of Canary Capital's proposal to launch a Litecoin (LTC) exchange-traded fund (ETF).

The U.S. Securities and Exchange Commission (SEC) has postponed its review of Canary Capital’s proposal to launch a Litecoin (LTC) exchange-traded fund (ETF).

The SEC has set deadlines for public feedback and rebuttals on the regulatory compliance of the proposal. The SEC invites public comments until May 26th and requires rebuttals to be submitted by June 9th.

Canary Capital’s Litecoin ETF Put on Hold

The Litecoin ETF delay follows a broader SEC trend where the commission has extended the evaluation periods for XRP and Dogecoin ETF proposals.

Canary Capital submitted its Litecoin ETF application to the SEC in October 2024. The SEC’s decision could have major implications for the future of the Litecoin ETF as a tradable asset despite the extended review period.

Canary Capital, a Nashville-based company, was founded by the co-founder of Valkyrie Funds, Steven McClurg. The firm is looking to launch the first spot Litecoin ETF in the U.S.

The application follows the SEC’s approval of Bitcoin and Ethereum ETFs in early 2024, which prompted other digital assets to launch similar investment products. Analysts expected a similar process for the LTC ETF, as some predicted a 90% chance for approval of the Litecoin ETF ahead of the SEC’s communique.

The SEC has invited the public to submit their comments on how the Litecoin ETF can prevent fraud and keep markets stable. Furthermore, the commission requests feedback on any distinct concerns about the ETF structure. The public feedback could influence the SEC’s decision, which will decide how the ETF operates in markets.

Litecoin Price Action

However, the announcement on the extended review did not have a major effect on Litecoin’s market value. The cryptocurrency is currently trading at $83, following a 3% decline in the last 24 hours.

However, experts believe that a potential approval of the Litecoin ETF could boost Litecoin’s market position.

Litecoin is one of the top cryptocurrencies, with a market capitalization of about $6.6 billion. The altcoin, which launched in 2011 as a Bitcoin fork, continues to dominate the crypto markets. As the demand for crypto ETFs continues to grow, the SEC’s decision could set a benchmark for other altcoin ETF proposals in the future.

There are increased uncertainties in the ETF approval process under the leadership of the new SEC chairman, Paul Atkins. The commission has received over 70 applications for altcoin ETFs and is expected to review and make a decision on the proposals.