TLDR
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- Spot crypto ETFs need SEC approval, unlike other ETFs that launch automatically.
- Teucrium XRP ETF bypassed SEC approval by holding Treasuries instead of crypto.
- Bill Morgan believes late October approvals for crypto ETFs are still possible.
- A government shutdown can stall the SEC’s review of spot crypto ETF filings.
As the U.S. government faces a potential shutdown, the future of spot crypto ETF approvals remains uncertain. Legal expert Bill Morgan addressed concerns over how the shutdown might affect the approval process, providing insights into the differences between various types of ETFs. While some ETFs might still be approved, Morgan suggests that the approval timeline for spot crypto ETFs could face delays, especially if the government remains closed.
Eleanor Terrett Clarifies the ETF Approval Process
Fox Business journalist Eleanor Terrett recently provided a detailed explanation of the approval process for different types of ETFs, with a focus on spot crypto ETFs. Terrett explained that not all exchange-traded funds follow the same approval procedure.
For example, the Teucrium XRP ETF, which holds Treasuries, cash, and swap receivables instead of direct crypto assets, is registered under the Investment Company Act of 1940. This structure allowed it to avoid requiring explicit approval from the SEC, and it automatically went into effect once the statutory waiting period expired.
In contrast, spot crypto ETFs, such as those for popular digital assets like Litecoin (LTC), Solana (SOL), or XRP, are regulated under the Securities Act of 1933. These products require active approval from the U.S. Securities and Exchange Commission (SEC) before they can be launched. As a result, any disruption to the SEC’s operations, including a government shutdown, could directly affect the timeline for their approval.
Bill Morgan Discusses the Impact of the Shutdown
Bill Morgan, a legal expert in the field, provided his insights into the potential effects of a U.S. government shutdown on spot crypto ETF approvals. He pointed out that the SEC’s Division of Corporation Finance is responsible for reviewing and approving ETF filings.
While some SEC functions could continue during a government shutdown, Morgan noted that the agency would likely reduce its operations. This reduction may result in delays in the approval process for spot crypto ETFs, as it would slow down the SEC’s ability to handle filings.
Morgan remained cautiously optimistic, suggesting that if the government reopens soon, approvals for some crypto ETFs could still take place in late October. However, he acknowledged the uncertainty surrounding the situation, stating, “Crypto never fails to surprise,” highlighting the unpredictable nature of the industry and regulatory processes.
Community Reactions to the News
Morgan’s comments prompted mixed reactions from the crypto community. Many users on the social media platform X (formerly Twitter) expressed optimism about the long-term potential of digital assets like XRP, despite the delays caused by the shutdown. Some community members also shared frustration over the slow pace of regulatory progress, which has been an ongoing issue for the industry.
Eleanor Terrett responded to Morgan’s insights, thanking him for his “fair and honest assessment” of the situation. This exchange emphasized the complex nature of the regulatory environment for crypto assets, with stakeholders showing both patience and concern as they await further developments.
Potential Delays in ETF Approvals
The shutdown’s impact on ETF approvals will primarily affect those that require SEC approval under the Securities Act of 1933. While ETFs registered under the Investment Company Act of 1940, such as the Teucrium XRP ETF, may not face the same delays, spot crypto ETFs are directly tied to the SEC’s approval process. If the shutdown drags on, it could push back the timeline for crypto ETFs, leaving investors and companies waiting for clarity.
In the meantime, industry stakeholders continue to monitor the situation closely, hoping for a swift resolution. As the government shutdown progresses, many are looking to the SEC for further updates on the status of ETF filings and approvals. The uncertainty around regulatory approval underscores the challenges faced by the crypto industry as it seeks greater integration into traditional financial markets.
