The U.S Securities and Exchange Commission (SEC) has reportedly begun the review of asset manager Canary Capital’s Litecoin spot exchange-traded fund (ETF) proposal, opening public feedback as it inches closer to becoming the first crypto investment product to be launched on Wall Street this year. 

SEC Places Canary Litecoin ETF Under Review And Comments Expected On February 29

Bloomberg’s senior ETF analyst James Seyffart was the first to report the news on his X account, stating that the SEC is currently reviewing the 19-4b filing submitted by Canary on January 16th for its Litecoin (LTC) spot ETF. He also noted that the proposal has made the most progress among the potential crypto ETF filings sitting on the SEC’s table in meeting regulatory requirements.

The investment management and advisory firm filed S-1 registrations with the securities watchdog back in October to launch Litecoin (LTC) and Ripple (XRP) ETFs. The proposed Litecoin ETF aims to provide retail and institutional investors with direct exposure to LTC through a comprehensive custody framework, without requiring investors to purchase and store the “digital silver” themselves.

The Canary Litecoin ETF, as it will be called, is designed to track the price movements of LTC as indicated by the CoinDesk Litecoin Price Index (LTX). the fund’s hybrid model allows specialized financial institutions, known as Authorized Participants (AP), to create and redeem large blocks of ETF shares through a cash-only system. Instead of directly handling the Litecoin, these broker-dealers would provide cash to the trust in exchange for newly minted shares.

Canary Litecoin ETF To Be Listed On The Nasdaq Stock Exchange

On January 15, Nasdaq submitted a 19b-4 application with the SEC (Securities and Exchange Commission) to act as a listing venue for Canary’s Litecoin spot ETF. This filing mandates self-regulatory organizations like the Nasdaq to propose rule changes with the SEC, thereby ensuring transparency and compliance with investor protection standards through public disclosure and comment. The 19b-4 is typically submitted before a new financial product is approved.

The process involves the regulator closely examining the market impacts of the Canary Litecoin ETF to ensure proper operational safeguards are in place before being listed on the Nasdaq.

However, the question now is whether the SEC will use the entirety of the 240-day review period or fast-track the approval process. The regulator is expected to respond on the Canary Litecoin ETF on February 29.

Canary Capital didn’t exist as a company when spot Bitcoin and Ethereum ETFs were approved by the SEC last year. Founded only in October 2024, the company moved in quickly to push out applications for ETFs backed by prominent crypto assets, including Solana (Solana), Hedera (HBAR), LTC, and XRP. Out of these, the Litecoin and Hedera ETFs are the first proposals of their kind.

GMCI USA Select Index Grows 182% As Global Interest In U.S-Based Crypto Assets Rise

Meanwhile, index provider GMCI, which specializes in creating indices for the digital assets markets, saw its USA Select Index post significant growth, rising from $95 during its November launch to $269 as of January 24, 2025.

The GMCI USA Select Index tracks the performance of U.S.-based cryptocurrencies while aiming to provide a standardized benchmark for the assets. It comprises 13 assets, namely Litecoin (LTC), Ripple (XRP), Solana (SOL), Dogecoin (DOGE), Chainlink (LINK), Avalanche (AVAX), Sui (SUI), Cardano (ADA), Hedera (HBAR), Uniswap (UNI), Near Protocol (NEAR), Stellar (XLM), and Aptos (APT).

The USA Select Index was created on the back of Trump’s victory in the U.S. Presidential elections. His recent executive order supporting the country’s leadership in the crypto sector increased attention on domestic protocols. The second Trump administration’s aim to bring more regulatory clarity with the newly formed Crypto Task Force at the SEC may contribute to increased investor confidence in U.S.-based digital assets.

This sentiment shift has had strong implications, with the U.S. quickly re-positioning itself as a global crypto hub. Retail investors are pushing crypto-focused apps to the top of the ranking across Apple’s App Store and Google’s Play Store while users are onboarded at record speeds. Meanwhile, Institutional investors are seeing elevated volumes across the spot Bitcoin and Ethereum ETFs, with strong indications that ETFs backed by other cryptocurrencies are in the pipeline.

The GMCI USA Select Index will be an interesting metric to follow the demand for U.S.-based digital assets globally.

At the time of writing, Litecoin (LTC) is trading at $128.23 – up 13.28% in the last 24 hours.