The U.S. Securities and Exchange Commission (SEC) has initiated a public comment period on Grayscale’s proposal to convert its Litecoin Trust into an exchange-traded fund (ETF). This follows the agency’s formal acknowledgment of NYSE Arca’s 19b-4 filing, a key step in the approval process.
SEC Opens 21-Day Comment Period for Litecoin ETF
The SEC is inviting public feedback on Grayscale’s Litecoin ETF proposal, with a 21-day submission window starting from its publication in the Federal Register. The proposal, filed by NYSE Arca, includes both the Grayscale Litecoin Trust and the Grayscale Solana Trust, as part of the broader push for regulated crypto investment products.
The regulator’s decision could result in approval, rejection, or further proceedings for in-depth evaluation. This comes amid a growing wave of crypto ETF filings from asset managers looking to expand digital asset offerings in the U.S. market.
Crypto ETF Filings Surge Amid SEC Leadership Shift
The increasing number of crypto ETF applications coincides with a leadership transition at the SEC. Following the departure of former Chair Gary Gensler, acting Chair Mark Uyeda appointed Commissioner Hester Peirce to lead a new crypto task force. Peirce has been a vocal advocate for clearer regulations surrounding digital assets and their classification within securities law.
In recent weeks, Grayscale has also filed for a Solana ETF and a Spot XRP ETF, adding to the growing list of firms seeking regulatory approval. The company’s XRP Trust, which holds $16 million in assets, is part of the latest wave of applications aiming to bring altcoin-based ETFs to mainstream markets.
Implications for Crypto Investment and Market Regulation
The SEC’s review of Grayscale’s Litecoin ETF follows its approval of spot Bitcoin ETFs in January 2024, marking a significant regulatory shift. Spot Ethereum ETFs were also greenlit around the same time, further expanding institutional access to crypto assets.
Market analysts speculate that a favorable decision on Litecoin’s ETF could pave the way for additional altcoin-based investment products. However, the SEC will assess key factors, including market risks, investor protection measures, and compliance with existing securities laws before reaching a final decision.
Following the public comment period, the SEC may either approve or deny the application, or initiate further review proceedings. Meanwhile, Grayscale continues to expand its crypto offerings, recently launching its Dogecoin Trust for institutional investors, fueling speculation about a potential DOGE ETF in the near future.
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