SEC halted! Litecoin ETF suddenly faced a "silent rejection", leaving the entry of the hundred billion alts market in limbo.

Original author: Cointelegraph

Compiled by: White55, Mars Finance

The U.S. Securities and Exchange Commission took no action on Thursday (the initial deadline for its decision), leaving the spot Litecoin exchange-traded fund from Canary Capital in limbo.

The silence of the U.S. Securities and Exchange Commission has left the crypto community uncertain about how the regulatory agency will operate during the federal government shutdown, and how its new universal listing standards will impact the timeline for dozens of cryptocurrency ETF applications awaiting approval.

Bloomberg ETF analyst James Seyffart and FOX News reporter Eleanor Terrett pointed out that the old 19b-4 deadline for cryptocurrency ETF applications may no longer apply, as the U.S. Securities and Exchange Commission (SEC) has requested applicants to withdraw these deadlines, leaving only the S-1 registration statement as the sole document requiring approval from the regulatory agency.

Source: Eleanor Terrett

However, the government shutdown has brought another layer of uncertainty.

In August of this year, the U.S. Securities and Exchange Commission (SEC) released an "action plan" to address government shutdown events, stating that it will "no longer review and approve registration applications." This includes new financial products, amendments to self-regulatory organization rules, and the review or acceleration of the effectiveness of registration statements.

It is currently unclear whether the U.S. Securities and Exchange Commission's silence on the Canary spot Litecoin ETF is entirely due to the government shutdown or if it is also a result of the new universal listing standards, which would render the 19b-4 deadline irrelevant.

Canary withdrew 19b-4 last week, making things more complicated.

At the request of the U.S. Securities and Exchange Commission, Canary withdrew its 19b-4 application on September 25, which may have contributed to the SEC's decision not to make a ruling on Thursday. It is currently unclear what impact the 19b-4 application will have on applicants who have not yet withdrawn their filings.

The SEC is still open, but capacity is limited.

In light of the government shutdown on Wednesday, the U.S. Securities and Exchange Commission stated that it will continue to operate, but the number of available staff is "very limited."

The U.S. Securities and Exchange Commission stated that its Electronic Data Gathering, Analysis, and Retrieval (EDGAR) database will continue to operate.

Altcoins are expected to boost the $75 billion spot cryptocurrency ETF market in the United States.

The market has been preparing for the approval of several new spot cryptocurrency ETFs, including LTC, Solana, XRP, AVAX, and DOGE.

Since its launch last year, the U.S. spot Bitcoin ETF has attracted $61.3 billion and $13.4 billion in inflows. Despite setbacks, Bloomberg ETF analyst Eric Balchunas said on Monday that the new listing standards from the U.S. Securities and Exchange Commission have increased the chances of some spot crypto ETFs being approved to 100%.

The listing standards are expected to simplify the processes under the 6c-11 rule, significantly reducing the approval time (which typically takes up to 240 days).

Paul Atkins, the chairman of the U.S. Securities and Exchange Commission, stated that the new listing standards will lower the barriers to accessing digital asset products and provide investors with more choices.