SEC’s ETF Approval Process and Leadership Impact

Despite recent acknowledgement from the Securities and Exchange Commission (SEC) regarding various spot crypto exchange-traded fund (ETF) applications, decisions for approval are unlikely before leadership is settled.

James Seyffart, an ETF analyst at Bloomberg Intelligence, expressed that it would be surprising to see any approvals before Paul Atkins is confirmed. “It’s been our assumption that anything that can be pushed until Atkins is officially at the SEC, will be pushed back,” he stated.

A source familiar with the situation mirrored this perspective, noting that while the current administration has shown willingness to break from precedent, it remains uncertain whether early approvals could happen.

Atkins was nominated by President Donald Trump to lead the SEC, following the resignation of former SEC Chair Gary Gensler in January. However, no confirmation hearing for Atkins has been set.

The SEC recently postponed decisions on multiple spot crypto ETFs, including applications for XRP, Solana (SOL), Dogecoin (DOGE), and Litecoin (LTC). This delay was anticipated but also caught many by surprise, according to Seyffart.

Historically, issuers have faced delays in receiving SEC approvals for spot Bitcoin (BTC) and Ether (ETH) ETFs despite the existence of regulated futures markets for these assets. While a regulated futures market isn’t legally required for launching ETFs based on these assets, it has influenced the SEC’s approval processes.

Currently, none of the outstanding ETF applications meet those established criteria. Nevertheless, Seyffart’s team believes there is a 65% or higher chance for several altcoin ETF approvals by the end of the year. Expectation for approvals of some applications due in May and June hinges on the new chair’s confirmation.

In previous reviews of Bitcoin and Ether ETF applications, the SEC utilized procedural delays, extending deadlines close to 240 days. While it’s expected that a chair will be in place by then, Seyffart cautions that immediate approvals are not guaranteed, although there is greater potential than at earlier deadlines for various spot crypto assets.