Crypto ETFs Approval Faces Uncertainty as Government Shutdown Looms, Bloomberg Analyst Says

Bloomberg analyst James Seyffart has shared his thoughts on a potential approval of the pending crypto ETFs. The analyst alluded to the looming government shutdown, which he noted could complicate the approval process for these funds.

Looming Government Shutdown Could Make The Crypto ETFs Approval ‘Wonky’

In an X post, the Bloomberg analyst stated that the potential for a government shutdown can complicate the approval process. This came as Seyffart’s colleague, Eric Balchunas, admitted that he was not yet sure how the launch schedule for these funds would work and that he expects more details from the SEC soon.

Polymarket data shows that there is currently a 69% chance that a shutdown will happen by October 1, with the deadline to pass a temporary funding bill tomorrow. Notably, the looming government shutdown has already stalled the markup of the CLARITY Act, which was scheduled for tomorrow.

Besides the looming government shutdown, Seyffart stated that it is unclear how long the SEC will take to approve the pending crypto ETF filings under the generic listing standards. The analyst noted that all of these pending applications have their prospectuses filed way too long ago.

As such, the timeline for approval is no longer about the number of days required, but about the SEC Division of Corporation Finance signing off on these funds.

SEC Instructs Issuers To Withdraw 19b-4 Filings

In an X post, Journalist Eleanor Terrett revealed that the commission has asked issuers of LTC, XRP, SOL, ADA, and DOGE ETFs to withdraw their 19b-4 filings following the approval of the generic listing standards, which replace the need for these filings. She added that withdrawals could start happening as soon as this week.

As the journalist further explained, the approval of the listing standards eliminated the need for exchanges to file 19b-4 forms requesting to list and trade shares of a particular crypto ETF, thereby simplifying and speeding up the process. There is usually a 240-day window for the SEC to approve 19b-4s.

However, the generic listing standards have predetermined requirements for an exchange to list and trade shares of an ETF, which streamlines the entire process. Terrett noted that this move signals that the new process is working as intended.

CoinGape had earlier reported that the SEC had also withdrawn delay notices for these crypto ETFs, which were also in line with the generic listing standards. Delay notices would also not be necessary under this new system since the SEC also needs to decide on the S-1 filings, which contain the fund’s prospectus.

However, under the generic listing standards, Terrett noted that the SEC could approve these funds at any time. It is worth mentioning that under the 19b-4 filings, the final deadline for the SEC to decide on some of these crypto ETFs begins this month, including the XRP, SOL, and Dogecoin ETFs.