Canary Capital Files for Spot LTC ETF with US SEC Following Filing of Spot XRP ETFs

Canary Capital has officially filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for a Litecoin exchange-traded fund (ETF), following a recent filing for a spot XRP product.

🚨 BREAKING: Canary Capital has filed for a spot Litecoin ETF with U.S. regulators, aiming to track the CoinDesk Litecoin Price Index using spot $LTC.

This move follows their recent filing for an XRP ETF, reflecting a trend of alternative crypto ETFs emerging ahead of the…

— Blockinsider (@BlockInsider_) October 15, 2024

The move comes just days after the firm submitted an application for an XRP-based ETF, following a similar move by asset manager Bitwise on October 1.

These filings indicate a growing interest in crypto-backed ETFs, especially after the SEC’s recent approvals of Bitcoin (BTC) and Ethereum (ETH) ETFs.

Canary Capital Files for Spot Litecoin ETF Amid Surge in Cryptocurrency Proposals

According to the filling, the S-1 registration statement for the Canary Litecoin ETF aims “to provide exposure to the price of LTC held by the Trust,” although details regarding a custodian and administrator have yet to be disclosed.

It was founded by Steven McClurg, who previously established Valkyrie Funds known for its other spot crypto ETFs.

The firm has been proudly impressed by their track record of 100% uptime since its inception, security and reliability alongside notable enterprise-grade use cases.

While some exchange-traded products already hold Litecoin, such as a product from CoinShares in Switzerland and a Grayscale trust in the U.S., the regulatory landscape remains complex.

James Seyffart, a Bloomberg ETF analyst, pointed out that Litecoin could have a regulatory status similar to Bitcoin, which saw the SEC approve spot Bitcoin ETFs earlier this year.

Seyffart explained that Litecoin’s regulatory classification as a commodity is likely due to its derivation from Bitcoin.

Also there are some ETPs that already hold Litecoin.$LITE in Switzerland from @CoinSharesCo $ELTC in Germany from @ETCGroupLLC (now owned by @BitwiseInvest )

We also have a @Grayscale trust here in the US:$LTCN

— James Seyffart (@JSeyff) October 15, 2024

However, he cautioned that for an ETF to gain approval under the current administration, there needs to be a sizeable and liquid futures market regulated federally in the U.S., a requirement Litecoin does not currently meet.

Can Canary Capital’s Spot XRP ETF Break Through SEC Barriers?

Canary Capital recently filed for a spot XRP ETF, following Bitwise’s similar filing. However, the SEC has yet to approve any spot XRP ETF.

The XRP token, issued by Ripple, has faced scrutiny since a 2020 SEC lawsuit alleging its launch was an unregistered securities offering. Ripple is accused of raising $1.3 billion through XRP sales.

Despite this, Ripple scored a partial legal win last year when a judge ruled that programmatic sales of XRP to retail investors did not qualify as securities.

Political perspectives on cryptocurrency could also influence the outcome of ongoing filings.

Vice President Kamala Harris appears to hold a more favorable stance on crypto than President Joe Biden, though not as pro-industry as former President Donald Trump.

Galaxy Research suggests Harris may adopt a “slightly more constructive approach” compared to Biden’s stricter regulatory actions, which have resulted in over 100 enforcement measures against the crypto industry.

As the 2024 elections approach, the crypto community is increasingly focused on candidates’ stances. Three in four crypto owners say these positions will affect their voting decisions.

Former President Trump has signaled intentions to fire SEC Chair Gary Gensler, making a potential Trump victory crucial for regulatory shifts.

For any ETF approval process to commence, a 19b-4 filing must be submitted by exchanges on behalf of issuers. This filing initiates the SEC’s approval timeline.