US SEC Delays Decision on Canary Spot SUI ETF: What to Know
Highlights
- The SEC has put off deciding on an approval for the Canary Spot SUI ETF, leaving investors waiting.
- The fact that the SEC is taking more time may mean they are being careful with approving crypto spot ETFs.
- This decision has sparked various opinions as some think it will hinder innovation.
An approval on Canary Spot SUI ETF’s filing has been postponed by the SEC. Since the US regulator hasn’t made a decision yet, investors and people tracking the market remain expectant.
Delay in SEC Approval Shows the Continued Watchful Eye on Crypto
The Securities and Exchange Commission (SEC) received a filing from Canary to start a spot ETF that will track the price of SUI. SUI is the official token of the Sui blockchain which was created to be both fast and scalable.
By using a spot ETF, investors can have exposure to SUI without buying the underlying token. This aligns with broader institutional interest in crypto-backed financial products, as seen in JPMorgan’s recent move to offer loans backed by BlackRock’s Bitcoin ETF.
Hence, it is no surprise that the SEC has been more conservative with approving crypto spot ETFs. It has accepted a few crypto ETFs for futures trading, but these are not the only choices investors want.
The agency claims its reason for the delay is because it sees risks of market manipulation and not enough protection for investors, a concern shared by exchanges like Binance, which recently fixed its Alpha Points Program to combat bot abuse.
Canary stood out among other filings for suggesting an SUI-based ETF, a first for this type of ETF. Players in the crypto sector viewed this as a development that encouraged more use of digital assets.
Regulatory Hurdles Persist for Spot Crypto ETFs
The US SEC typically uses its full review periods, which can stretch over several months. During that time, it collects public feedback and reviews technical and legal details. Canary will need to wait until the next review window starts.
The crypto community have varying reactions. Several worry that crypto innovation in the US will be further held back by the additional delay. Others believed the actions made sense as the SEC is very careful with crypto.
The announcement didn’t lead to a significant fall in SUI price. Many weren’t expecting the announcement to be a firm yes or no.
Analysts think the continuous actions by the agency suggest that regulators are cautious about fitting crypto into the current law governing the traditional finance industry. Until there are clear regulatory guidelines, the US SEC is expected to proceed carefully.
The delay points to the fact that crypto-related financial products are still subject to a lot of regulatory challenges. Spot ETFs give a more immediate exposure to crypto assets which makes them more appealing to potential investors.
No set date has been given for the agency’s next decision yet. This development will be closely watched by the crypto community and by investors.
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