Crypto ETFs tracking SOL, HBAR and Litecoin expected to launch this week despite government shutdown

Multiple cryptocurrency exchange-traded funds are set to launch this week despite the U.S. government shutdown.

That includes the Canary Litecoin ETF, the Canary HBAR ETF, and the Grayscale Solana Trust ETF, people familiar with the matter told The Block.

The planned launches come in the wake of Oct. 9 guidance from the SEC, released a week into the shutdown, clarifying procedures for firms seeking to go public. In it, the SEC said that if firms want to go public, they can file an S-1 registration statement without what's called a delaying amendment, according to a person familiar with the process. A delaying amendment means the ETF wouldn’t go into effect after 20 days, allowing the SEC time to work through comments.

Notably, the S-1 has to be final, and if changes are made, that restarts the clock for them to go into effect in 20 days.

"If you do that, you can launch, but you're taking a risk that the SEC might have comments that you did not clear through them, and then there might be things that are problematic with your S-1 that a shareholder can sue you over if there's a misstatement or omission," one of the persons familiar said.

Firms confident with their filings are moving forward, the person said. 

Before the shutdown earlier this month, dozens of crypto ETFs were primed for SEC sign-off. The SEC has been operating under its shutdown plan, which significantly limits what staff can work on as many are furloughed.

Before the shutdown, the SEC approved listing standards proposed by three exchanges, asking the agency to change a rule governing the trading and listing of commodity-based trust shares, which sets out specific requirements to have certain shares listed on their exchanges. The approval means dozens of crypto ETF applications could go live more quickly, without needing to go through the 19b-4 process, significantly shortening the timeline for those funds to begin trading.

Firms looking to launch crypto ETFs without the SEC's sign-off need to meet the listing standard, the person familiar said.

Filings called Form 8-As have begun to trickle in, including two on Monday from Canary Capital to track Litecoin and another to track HBAR. The Form 8-As are essentially incorporating the S-1s to then list on an exchange, the person said.

Also on Monday, managing partner at Multicoin Capital Kyle Samani posted on X announcing the launch of the Bitwise SOL Staking ETF, but then later deleted the post. Bitwise declined to comment when asked.

When asked whether there would be a wave of crypto ETFs being launched this week, the person said it depends on how far along the issuer is in the process.

"They're [the SEC] not necessarily as far along with the other assets," the person said. "So you might not see this done for other assets. We'll see what happens."