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The U.S. Securities and Exchange Commission (SEC) has postponed decisions on several crypto ETF proposals, including notable assets like Dogecoin and Hedera Hashgraph (HBAR), as it seeks further public input and scrutiny.
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This delay affects multiple high-profile applications, extending review periods and emphasizing the SEC’s cautious approach amid evolving regulatory and market dynamics.
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According to Bloomberg senior ETF analyst Eric Balchunas, approximately 72 crypto-related ETFs remain under SEC review, highlighting the growing interest and regulatory complexity in the crypto ETF space.
SEC delays Dogecoin and HBAR crypto ETF approvals, requesting more public comments amid regulatory scrutiny of over 70 crypto ETFs under review.
SEC Extends Review Periods for Dogecoin and HBAR Crypto ETF Proposals
The U.S. Securities and Exchange Commission has officially extended the review timelines for several cryptocurrency exchange-traded fund (ETF) applications, including the Bitwise Dogecoin ETF and Grayscale’s Hedera Hashgraph (HBAR) ETF. These extensions, announced in early to mid-June 2024, reflect the regulator’s intent to gather additional public commentary and carefully evaluate the legal and policy implications surrounding these innovative financial products. The SEC’s decision underscores its commitment to ensuring that all proposed ETFs comply with federal securities laws and investor protection standards.
Legal and Policy Considerations Underpinning the SEC’s Decision
The SEC’s filings reveal that the postponements are driven by concerns related to whether the proposed crypto ETFs meet the stringent requirements of Section 6(b)(5) of the Securities Exchange Act. This section mandates that exchanges must prevent fraudulent and manipulative acts and practices, while safeguarding investors and the public interest. The SEC’s review process involves assessing whether the exchanges’ proposed rule changes—necessary to list these new crypto ETFs—align with these legal standards. For instance, the Bitwise Dogecoin ETF is set to be listed under NYSE Arca Rule 8.201-E, which governs commodity-based trust shares, while Grayscale’s Hedera ETF and Canary Capital’s HBAR ETF are evaluated under Nasdaq Rule 5711(d), ensuring robust trading and monitoring frameworks.
Broader Impact on the Crypto ETF Market and Industry Outlook
The SEC’s cautious stance has broader implications for the crypto ETF market, which currently has a backlog of approximately 72 crypto-related ETF applications awaiting approval. This growing pipeline indicates strong institutional interest but also highlights the regulatory challenges facing the sector. The extended review periods for Solana ETFs from Bitwise, 21Shares, VanEck, and Canary Capital, as well as Grayscale’s Cardano ETF and Bitwise’s Ethereum staking ETF, reflect the SEC’s methodical approach to balancing innovation with investor protection. Market participants should anticipate continued regulatory scrutiny as the SEC seeks to establish clear precedents for crypto asset listings.
Encouraging Public Participation and Transparency in the Review Process
The SEC has emphasized that these delays do not imply any predetermined conclusions regarding the merits of the proposals. Instead, the agency actively encourages interested parties to submit comments and insights on the proposed rule changes. This open comment period is a critical component of the SEC’s transparent regulatory process, allowing stakeholders—including investors, industry experts, and advocacy groups—to contribute to the dialogue. Such engagement is vital for shaping a regulatory framework that supports innovation while maintaining market integrity and investor confidence.
Conclusion
The SEC’s decision to extend review periods for Dogecoin, HBAR, and other crypto ETF proposals reflects a prudent regulatory approach amid a rapidly evolving digital asset landscape. By soliciting additional public input and thoroughly examining legal and policy issues, the SEC aims to uphold investor protections and market fairness. As the crypto ETF market continues to expand, stakeholders should remain attentive to regulatory developments and participate actively in the consultation process to help shape the future of crypto investment products.
