SEC pushes back decisions on BlackRock and Franklin crypto ETFs

The Securities and Exchange Commission (SEC) has pushed back decisions on a list of high-profile crypto exchange-traded funds (ETFs). The extensions apply to proposals from two of the industry’s largest players: BlackRock and Franklin Templeton.

Per SEC filings, the amendment from Franklin to permit staking within its Ethereum ETF is now pending a decision by November 13. Its Solana and XRP ETFs were delayed a day later on November 14. The review period for this proposed amendment has been reset to October 30 for BlackRock’s iShares Ethereum Trust.

The SEC didn’t indicate whether it prefers to approve or deny the ETF. Instead, it used its authority under the Securities Exchange Act Section 19(b) to take the longest possible extension time. These rules enable the Commission to stall for up to 180 days and occasionally for another 60 days.

Franklin Templeton first requested its proposals for Ethereum, Solana, and XRP, with Cboe BZX in March, and Nasdaq submitted BlackRock’s iShares Ethereum staking amendment in July. Every product is designed to offer investors exposure to crypto assets through regulated markets, a factor identified as key to mainstream adoption.

SEC extends ETF reviews

The language in the SEC filings is clear enough. The delays are not rejections; they are evidence of the Committee’s view that the proposals merit additional scrutiny.

Officials say that the agency has to balance factors like market stability, investor protection, and the complexity of staking before issuing final rulings. Staking in particular remains sensitive. 

These newest extensions are part of a larger drift. The SEC also pushed back its decision on the Bitwise Dogecoin ETF and the Grayscale Hedera ETF to Nov. 12. The summer delivered another spate of postponements. New reviews were extended in August for NYSE Arca’s applications for the Truth Social Bitcoin and Ethereum ETF. Those are now due by October 8. The 21Shares and Bitwise Solana ETF was postponed to October 16, and the 21Shares Core XRP Trust to October 19.

As reported by Cryptopolitan last month, the regulators delayed deciding on Cboe BZX’s proposal to list the WisdomTree XRP Fund, giving them a new deadline of October 24. Not coincidentally, the PENGU ETF was also delayed until October 12.

Still, some analysts believe the regulator could approve all pending XRP ETFs simultaneously, mirroring its approach with Bitcoin and Ethereum ETFs earlier this year. Bloomberg’s Eric Balchunas and James Seyffart estimate a 95% chance of approval before year-end.

This list of such proposals is getting longer and longer. By the end of August, the SEC had at least 92 crypto-linked ETFs under active review. That encompasses not only money linked to Bitcoin and Ethereum, but also newer altcoins like Solana, Hedera, and XRP, as well as experimental staking products.

That piling backlog shows how quickly legacy finance companies move into digital assets. BlackRock, Franklin Templeton, WisdomTree, Bitwise, Grayscale, 21Shares, and others have all hurried to file products. Each is vying for an early-mover edge in a market that some analysts predict may soon outpace commodity ETFs such as gold.

SEC prepares new crypto framework

Despite the setbacks, there are signs of progress. Paul Atkins, the Chair of the SEC, has revealed “Project Crypto,” an ambitious effort to overhaul the securities rules that apply to digital assets. The proposal is intended to standardize trading, lending, and staking rules around the crypto world.

Speaking at the OECD Roundtable on Global Financial Markets last week in Paris, Atkins said that crypto’s time had come and added that the SEC would establish a framework to protect investors while providing clarity for issuers seeking to launch new ETFs.

The agency is working on a generic listing proposal for ETFs based on tokens. If approved, it could pave the way for some crypto ETFs to get up and running without going through long, individual rule changes.

Though staking and altcoin ETFs are still on hold, some products are advancing more quickly. The REX-Osprey has filed several crypto funds under the 1940 Act, a separate regulatory track. These ETFs track the performance of Bitcoin, Dogecoin, and XRP.

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