SEC Hesitation on Approving Grayscale ETFs for ADA and AVAX: Reasons Explored
The U.S. Securities and Exchange Commission (SEC) has extended its decision on Grayscale's proposals for Cardano [ADA] and Avalanche [AVAX] Exchange-Traded Funds (ETFs) until July 15th, according to a recent announcement. The extension is part of the SEC's standard review process, providing the Commission with additional time to examine the proposed rule changes and address any concerns raised during the review.
The delay in the decision follows Section 19(b)(2) of the Securities Exchange Act of 1934, which permits extensions beyond the initial review windows. The extension allows regulators to conduct a thorough assessment of all aspects of the applications, including potential risks, before making a final decision on whether to approve, reject, or initiate further proceedings.
Grayscale initially filed the proposal to list and trade shares of the Avalanche Trust on February 16th, with the public comment period opening on February 16th. The SEC had initially planned to decide on the matter by May 31st, bringing the review period to an end. However, to provide a more comprehensive analysis of the application and carefully consider public comments, the Commission extended the deadline to July 15th.
Despite the regulatory delay, both Cardano and Avalanche have shown resilience in the market. At the time of writing, ADA was trading at $0.7524, marking a modest 0.60% increase in the previous 24 hours. AVAX, meanwhile, had climbed by 2.41% to reach $23.77. On Polymarket, the likelihood of Cardano's spot ETF approval is estimated at 67%, although no similar prediction data is available for Avalanche at this time.
The SEC's latest move comes in the wake of a broader trend of careful scrutiny by the Commission across various crypto-based investment products. Late last month, the Commission also delayed its decision on Grayscale's proposed XRP and DOGE spot ETFs on May 20th. To date, the SEC has yet to approve any spot ETFs for altcoins other than Bitcoin.
- Within the cryptocurrency market, Bitcoin (BTC) and Ethereum (ETH) continue to be mainstays, while the SEC's extended review period for Cardano [ADA] and Avalanche [AVAX] Exchange-Traded Funds (ETFs) has not deterred their market sentiment.
- In the crypto exchange landscape, Grayscale's initial application to list and trade shares of the Avalanche Trust was lodged on February 16th, with public comment period opening on the same day.
- With the SEC's decision on Grayscale's Dogecoin (DOGE) and XRP spot ETFs also delayed until May 20th, it appears that the Commission is carefully assessing the potential risks associated with all proposed altcoin ETFs, reflecting a broader trend of regulatory scrutiny in the crypto finance sector.
- Technology-driven innovations in the field of crypto finance, such as Cardano, Avalanche, Dogecoin, XRP, and even Cardano's competitor, Cardano [ADA], have exhibited resilience, even amid regulatory uncertainties.
- On Polymarket, the likelihood of Cardano's spot ETF approval is estimated at 67%, indicating a positive sentiment toward this particular altcoin ETF in the overall crypto investing community.
- As the SEC deliberates on altcoin ETF proposals, the technology that underpins these cryptocurrencies matures, affording investors exciting opportunities across various aspects of the finance and technology spectrum.
