US SEC Seeks Public Comments on Grayscale’s Litecoin ETF Proposal

The U.S. Securities and Exchange Commission (SEC) has invited public comments on a proposal to convert Grayscale’s Litecoin Trust into an exchange-traded product (ETP). The request follows an official acknowledgment of NYSE Arca’s 19b-4 filing, submitted on behalf of Grayscale.

US SEC Calls for Comments on Grayscale Litecoin ETF

The SEC has opened a public comment period regarding the proposed conversion of Grayscale’s Litecoin Trust into an ETF. The agency acknowledged NYSE Arca’s filing and has requested comments to be submitted within 21 days of the proposal’s publication in the Federal Register.

NYSE Arca had previously submitted a 19b-4 filing, a necessary step in the crypto ETF approval process. This filing pertains to both the Grayscale Litecoin Trust and the Grayscale Solana Trust. The SEC’s decision will involve either approval, disapproval or the initiation of further proceedings.

This development follows a recent move by top asset managers to expand crypto ETF offerings. Grayscale filed a 19b-4 form to convert its Litecoin Trust into an ETF, while Coinshares submitted an S-1 form for an LTC ETF. The US SEC decision could shape the future of Litecoin investment products in the U.S.

Crypto ETF Filings Increase Amid Leadership Transition

In recent weeks, several firms have submitted proposals for crypto-based ETFs, including funds for Dogecoin (DOGE) and other altcoins. The rise in filings comes at a time when the US SEC is undergoing a leadership transition.

Late last month, the asset manager also filed for a Solana ETF before submitting its Spot XRP ETF application. Grayscale aims to convert its XRP Trust, which holds $16 million in assets, into an ETF listed on the NYSE. This filing makes Grayscale the seventh asset manager to seek SEC approval for an XRP ETF.

Following the departure of former SEC Chair Gary Gensler, acting Chair Mark Uyeda appointed Commissioner Hester Peirce to oversee a dedicated crypto task force. Peirce has expressed interest in refining the classification of crypto assets and adjusting the registration process for digital asset firms.

Crypto ETFs and Market Developments

The US SEC approved the spot Bitcoin ETF in early January 2024, marking a shift in regulatory developments. It also approved the spot Ethereum ETFs at the time as part of the project to endorse crypto investment instruments.

With the ongoing review of the Grayscale Litecoin ETF, investors anticipate the US SEC will extend similar approvals to altcoin-based ETFs. The decision could set a precedent for future filings involving various digital assets.

The SEC will thus consider the response before making the final decision on the conversion of Grayscale’s Litecoin Trust. Actually, the review comprises checks by the regulator on the market risk, investor’s protection and conformity to present securities laws.

After the comment period for the concerned public, the agency may approve the application, deny the license or open up for further proceedings for the detailed evaluation.

Meanwhile, Grayscale also recently launched its Dogecoin Trust, providing institutional investors with exposure to DOGE. The Trust is now open for daily subscriptions to accredited investors and operates similarly to Grayscale’s other single-asset investment trusts. This development has sparked speculation about a potential DOGE ETF filing in the future.