The US government shutdown has put a halt on the approval of exchange-traded fund (ETF) filings by the Securities and Exchange Commission (SEC), impacting the potential launch of altcoin ETFs. The SEC’s “Operations Plan Under a Lapse in Appropriations & Government Shutdown” states that new financial products will not be reviewed or approved, registration statements will not be accelerated, and non-emergency support to registrants will not be provided.
This means that over 100 crypto-related filings, including the necessary S-1 effectiveness work for spot products, are now on hold until funding is restored. Nate Geraci, President of NovaDius Wealth, highlighted the impact of the shutdown on the launch of new spot crypto ETFs, suggesting that “ETF Cryptober” may be delayed.
Altcoin ETF issuers had anticipated October as the month for ETF approvals, but the government shutdown has delayed the process. The SEC recently adopted a generic listing standard for crypto exchange-traded products, simplifying the approval process by eliminating the need for token-specific filings. This move was expected to increase the likelihood of altcoin ETF approvals to 100%.
Reports indicated that the SEC had requested issuers to withdraw previous altcoin ETF filings to be approved through the standard process. Issuers had expressed confidence in the approval of Solana spot ETFs between October 6 and 10. However, the shutdown has put these plans in jeopardy as the SEC is unable to take any action on new product approvals during this time.
Despite the delay caused by the shutdown, the policy direction towards altcoin ETF approvals remains positive. Once the government reopens and funding is restored, the generic standards framework will streamline the approval process for altcoin ETFs. The backlog of filings will then become a sequencing issue rather than a policy hurdle.
In conclusion, the altcoin ETF floodgates remain closed for now, but there is optimism for approval once the government shutdown ends. The industry is eagerly awaiting the reopening of the SEC for the launch of altcoin ETFs in the near future.