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Crypto Win: SEC Drops Gensler-Era DeFi and Custody Rule Proposals 

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  • SEC formally withdraws DeFi exchange proposed under Gary Gensler
  • Controversial crypto custody rule officially removed by SEC
  • New SEC leadership adopts a friendlier stance on digital assets

The U.S Securities and Exchange Commission(SEC) has officially dropped several rules that were proposed under former Chair Gary Gensler. These proposals include definitions of exchanges and strict custody rules on crypto-related activities. The move comes after wider regulatory changes under new leadership and industry discussions.

SEC Rescinds DeFi and Custody Rule Proposals

The agency withdrew amendments to Exchange Act Rule 3b-16, which proposed inclusion of decentralized finance platforms under national securities exchange rules. Blockchain policy experts and market participants criticized the proposal which was published in April 2023. The SEC’s new position represents a change in its approach to new digital asset technologies.

Also, the SEC withdrew a proposed custody rule amendment that would have affected crypto asset investment advisers. The regulation would have forced the custodians to comply with new standards, which raised concerns in financial institutions. Opponents warned that the rule could diminish crypto custody services in a constrained banking environment.

The SEC also dropped other proposals such as cybersecurity risk management and ESG compliance requirements to investment advisers and funds. These rules proposed in Gensler’s tenure, were criticized as an overreach and unclear in practical implementation. Their removal matches the agency’s shift in pro-crypto policies.

Gensler, the former SEC Chair, led the agency between 2021 and January 2025 and utilized crypto enforcement as a regulatory method . This approach led to lack of legal clarity in decentralized platforms and digital asset custodians. 

Regulatory Shift Under New SEC Leadership

The commission led by Chair Paul Atkins, has re-evaluated its crypto approach since January 2025. His administration stresses on clear instructions and consultation rather than enforcement-based policy. Moreover, Atkins voiced support for users to maintain custody their of digital assets.

In March 2025, acting Chair Mark Uyeda, asked SEC staff to reconsider the proposed custody rule amid growing opposition. The action indicated the increased readiness of the agency to reexamine aggressive approach from the previous administration. The formal withdrawal on Thursday completes that correction of course.

The recent policies are part of a shift in the U.S crypto environment since the election of President Donald Trump. Trump’s administration has advanced a more positive approach to blockchain and digital finance. Regulatory bodies have also adjusted their strategies in order to promote responsible adoption.

SEC Delays Review and Verdict on Various ETF Proposals

SEC also has pushed review dates on several crypto ETF applications, such as Dogecoin and Hedera products. On June 11, it initiated the review for the Bitwise Dogecoin ETF and requested public feedback. On June 12, it extended the review for Grayscale’s Hedera Trust.

On June 10, SEC also announced a delay in Canary Capital’s HBAR ETF application, to enhance regulatory scrutiny. The ETF applications are still in formal review with no particular date of approval.

Ripple-SEC Case Update: Joint Motion Seeks $125M Escrow Resolution

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Key Takeaways:

  • Ripple and the SEC have proposed a $50M payment to settle the $125M penalty, with the rest returned.
  • The court’s ruling on “exceptional circumstances” is key to finalizing the deal.
  • If the motion is rejected, the appeals could proceed, derailing the settlement.

The U.S. SEC and Ripple Labs have jointly urged the U.S. District Court in Manhattan to dissolve the final injunction and authorize the distribution of the $125 million civil penalty currently in escrow.

The proposed division includes $50 million to be paid to the SEC, with the balance returned to Ripple. This move marks a critical step toward finalizing a settlement and avoiding a prolonged legal battle in the appeals court.

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Ripple-SEC Case Update: Joint Motion Seeks $125M Escrow Resolution 2

The renewed motion, filed under Federal Rules 60(b)(6) and 62.1, stresses that “exceptional circumstances” justify revisiting the prior judgment. Earlier, Judge Analisa Torres denied a similar request due to a lack of clarity regarding these circumstances.

This time, Ripple and the SEC jointly emphasized that dissolving the injunction and revising the penalty distribution are both essential to executing their settlement agreement.

Settlement Risks Hinge on Court Response

Attorney Bill Morgan, who has closely followed the legal proceedings, noted that both parties are now invoking legal precedent supporting modification of judgments when it facilitates settlement.

According to Morgan, the inability to dissolve the injunction would void a central clause in the agreement, leading to the collapse of the entire settlement and a resumption of the appeals process.

The appeals, registered under case numbers 24-2648(L) and 24-2705(XAP), remain active. If the court does not offer an indicative ruling supporting the proposed modification, the SEC and Ripple will be unable to jointly request a limited remand from the U.S. Court of Appeals. Such a remand is vital to return the case to the lower court for settlement-based resolution.

Ripple vs. SEC Case Closure Still in Limbo

The legal saga is still ongoing, but it hasn’t stopped social media from suggesting that everything came to a close months ago. This conflict is still unresolved due to the fact that Ripple and the SEC are awaiting approval for yet another motion.

If the judge rules in their favor, it may truly wrap up the litigation that has been going on for years. On the other hand, if the judge denies the ruling, litigation will be extended through the appeals process, which could undo months of progress toward a settlement.

While everyone is waiting for Judge Torres’s answer, legal observers and crypto enthusiasts are on the edge of their seats. Whether Ripple wins or loses could set an important precedent for how future SEC settlements involving cryptocurrencies will be decided.

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Massive Win for ADA: Cardano Officially Joins Nasdaq’s Elite Crypto Index

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Key Takeaways

  • Cardano’s ADA joins the Nasdaq Crypto Index alongside Bitcoin and Ethereum.
  • Hashdex ETF to rebalance holdings once SEC rule update is approved.
  • Institutional recognition boosts ADA’s standing in regulated finance.

In a milestone that reflects growing convergence between traditional finance and digital assets, Cardano’s ADA has officially been added to the Nasdaq Crypto Index. The update was shared by TapTools, a leading Cardano analytics platform, and later confirmed by Nasdaq filings.

ADA joins Bitcoin and Ethereum in one of the most closely watched institutional crypto benchmarks, the backbone of the Hashdex Nasdaq Crypto Index ETF. This move expands the index from five to nine digital assets, introducing ADA, Solana (SOL), Ripple (XRP), and Stellar (XLM) to its holdings.

The announcement came through Nasdaq’s Form 8-K filing and indicates a shift in institutional priorities. Beyond market capitalization, the index now considers regulatory readiness, custody solutions, and trading infrastructure.

According to Hashdex’s index methodology, this inclusion is not symbolic, it’s structural. ADA’s presence lowers BTC’s weight from 88% to 78% and ETH’s from 12% to 10%, redistributing exposure to the new entrants.

The rebalance won’t be reflected in the ETF’s actual holdings until the U.S. Securities and Exchange Commission (SEC) approves changes to its underlying rulebook. That deadline is set for early 2026. Until then, the ETF continues to hold only BTC and ETH, despite the index showcasing all nine assets.

Inside the Hashdex Nasdaq Crypto ETF

Co-developed by Nasdaq and Hashdex, the NCIQ ETF is designed for institutional exposure to cryptocurrencies. It initially included Bitcoin, Ethereum, Litecoin, Chainlink, and Uniswap, each selected for their liquidity, exchange support, and custodial frameworks. The ETF is U.S.-listed and rebalances quarterly to remain in sync with the index.

The current limitation to BTC and ETH holdings in the ETF reflects regulatory delays. However, in regions with more flexible oversight, international versions of the fund may already hold the complete index composition, including ADA.

For any asset to be included in the index, it must satisfy specific eligibility standards: consistent trading volume, presence on regulated exchanges, and support from institutional-grade custody platforms.

Strategic Significance for Cardano

Cardano’s inclusion is not about mere approval; it symbolizes progress in ADA’s consolidation within the regulated financial framework. With this listing, ADA secures its spot in institutional dashboards, model portfolios, and risk-managed allocation strategies.

Consequently, the Cardano network benefits from added liquidity, enhanced visibility, and more consistent market support as institutional investors can finally access ADA in a structured manner.

Such a development would indicate an increasing bond between blockchain technology and institutional capital, thus making Cardano not an experimental asset but rather a proven part of the financial infrastructure.

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Nasdaq Files First 21Shares SUI ETF, SEC Review Process Begins

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  • SEC review begins as Nasdaq files 21Shares’ spot SUI ETF form
  • SUI stablecoin volume surged past $110B in May 2025 alone
  • 21Shares SUI ETF avoids staking, forks, and airdrop exposure

Nasdaq has officially published the 19b-4 form for the 21Shares SUI ETF to the SEC’s public register. This application starts the formal review process of the first U.S-based spot ETF tied to the SUI token. This comes after a previous 21Shares’ S-1 registration and indicates a growing trend of regulated crypto investment products.

21Shares SUI ETF Structure

21Shares seeks to launch a SUI ETF to track the CME CF Sui Dollar Reference Rate. The fund will offer passive exposure to the SUI token without using leveraged or yield-generating strategies. Instead, it will have a transparent structure through daily NAV calculations for fair valuation.

BitGo and Coinbase Custody will store the SUI tokens on behalf of the Trust. The ETF will not include staking, airdrops or token forks in its valuation. The shares will be in fixed blocks of 10,000, so as to provide stability in operations and minimum market disruption.

The product will offer institutional-quality access to the native asset of the Sui blockchain. The Trust will transact only in cash with the authorized participants to reduce risks. The transfer and conversion of tokens will be done through fund administrators on behalf of investors.

Institutional Interest in Sui Network

The Sui network has drawn a lot of interest from financial institutions and developers since its mainnet launch in 2023. The global assets under management of SUI-based investment products have surpassed $300 million. 21Shares has seen increased inflows across its Sui ETPs listed on Euronext Paris and Amsterdam.

Canary Capital, VanEck, and Franklin Templeton have initiated programs associated with the Sui blockchain. Grayscale and Ant Financial have either launched or explored other products linked to Sui in the last three quarters. These advancements show the increased interest in the network due to real-world uses and institutional integration.

Sui Network Market Success

The architecture of Sui enables fast and cheap transactions and powers applications related to DeFi, gaming and tokenization of assets. It’s unique model boosts scalability which has led to robust ecosystem growth. In May 2025, the volume of stablecoin transfers on Sui exceeded $110 billion.

The network ranks eighth in total value locked, with a stablecoin market cap of more than $1.1 billion. The stablecoin transactions on Sui has exceeded 190%  year-to-date, boosting confidence in its infrastructure. This performance strengthens demands for wider integration of financial products.

Digital Asset Regulation Gains Momentum in U.S

Meanwhile, U.S legislators have advanced the Digital Asset Market Clarity Act to clarify regulatory jurisdictions. The bill has cleared the House Agriculture Committee in a wide bipartisan vote and is now with the Financial Services Committee. It aims to separate the roles of SEC and CFTC as well as protect developers and non-custodial platforms.

SEC Fast Tracks Solana ETF Review for Potential July Approval

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  • The SEC is fast-tracking Solana ETF proposals, requesting updated S-1 filings with potential approvals as early as July.
  • Regulators are considering allowing staking within Solana ETFs, a potentially game-changing feature for investors.
  • Bloomberg analysts estimate a 90% chance of Solana ETF approval in 2025, similar to the outlook for a Litecoin ETF.

The U.S. Securities and Exchange Commission (SEC) is reportedly expediting the review process for several Solana exchange-traded fund (ETF) proposals, according to sources familiar with the matter.

The fast-tracking comes as the SEC has requested that issuers submit updated S-1 filings, key registration documents for new securities, within the next week, a move interpreted by industry insiders as a sign that the regulatory body could issue approvals within three to five weeks. If accurate, spot Solana ETFs could gain approval as early as July, months ahead of final decision deadlines that extend into October.

The SEC is expected to return comments on the S-1 filings within 30 days of submission, setting the stage for a summer rollout. Sources also confirmed that the agency has been in close dialogue with ETF sponsors about critical components of the products, including how investor redemptions would work in crypto markets.

SEC May Allow Staking in Solana ETFs

Notably, the SEC is probing whether staking, a mechanism by which investors can earn yield by supporting the Solana network, will be integrated into the ETFs. While typically a contentious issue in regulatory circles, the SEC is reportedly open to allowing staking as part of these investment vehicles.

“If staking gets approved, it changes the game,” wrote one crypto enthusiast, known as Crypto Racoon, on social platform X.

A who’s who of asset management firms is in line to offer Solana ETFs, including Grayscale, VanEck, 21Shares, Bitwise, Franklin Templeton, and Canary Capital. Many of these firms have been in active discussions with the SEC and its crypto-specific task force to finalize details, per Bloomberg ETF analyst James Seyffart.

According to Seyffart and fellow Bloomberg analyst Eric Balchunas, the probability of Solana ETF approval in 2025 now stands at 90%, mirroring the odds for a potential Litecoin ETF.

“We think the SEC may now focus on handling 19b-4 filings for Solana and staking ETFs earlier than planned,” Seyffart noted this week.

Grayscale Leads Solana ETF Push

Grayscale is once again leading the charge with its strategy to convert its existing Solana Trust into a spot ETF, a regulatory playbook that proved successful with both its Bitcoin and Ethereum offerings. The SEC delayed a decision on Grayscale’s proposal in May, calling it a procedural move rather than a rejection. Delays were also issued for similar filings by Franklin Templeton, VanEck, and Fidelity in late April and May.

The acceleration in the Solana ETF review follows a landmark year for crypto ETFs. The SEC gave the green light to spot Bitcoin ETFs in January 2024 and approved Ethereum ETFs in May 2025, marking a turning point for institutional crypto access.

Following the news, Solana (SOL) saw a 4% uptick in price, trading near $165 at the time of writing, according to CoinMarketCap data. Market sentiment remains bullish, with investors betting that Solana may soon join the ranks of Bitcoin and Ethereum as a regulated investment product on Wall Street.

SOL 1D graph coinmarketcap 7

As the SEC opens new doors for crypto ETFs and possibly staking, the crypto asset class inches closer to mainstream adoption, with Solana now standing squarely in the spotlight.

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SEC Set to Decide on Solana ETF: Will It Open the Door for Institutional Investment?

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  • Solana ETF approval could come by July, with a final decision expected by October, pending SEC review of updated filings.
  • Issuers are required to submit revised filings, addressing in-kind redemptions and staking integration.
  • Firms like Grayscale, VanEck, and Fidelity are preparing Solana ETFs, signaling increased institutional interest in digital assets.

Solana is moving closer to gaining approval for an exchange-traded fund (ETF) in the near future. Blockworks reports that the SEC is likely to make its ruling by July, although it may take until October to finalize the decision. Currently, the SEC is examining updated filings from companies that have launched Solana ETFs.

The SEC is requiring Solana ETF issuers to submit revised S-1 registration statements within the following week. The SEC will assess how the fund should handle in-kind redemptions and whether including staking in the fund is allowed. According to reports, SEC members are considering support for staking projects, which may encourage more institutions to get involved.

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Grayscale’s Solana ETF Plans

James Seyffart, an analyst from Bloomberg Intelligence, expects approval to come sooner than expected. Even though the SEC’s standard review can take 240 days and ends in October, Seyffart stated the agency wouldn’t delay considering these filings. Hopefully, the SEC will move quickly and reach a decision sometime in July.

Several major asset management firms, including VanEck, Bitwise, Fidelity, Grayscale, Franklin Templeton, Canary Capital, and 21Shares, are planning to issue a Solana ETF. Grayscale is aiming to bring its current Solana Trust under an ETF, with the method the company used making ETFs for Bitcoin and Ethereum. This turn demonstrates more institutional investment in Solana as its ecosystem becomes more diverse.

Solana Follows Bitcoin’s Path

In February, the SEC stated that it has agreed to consider Grayscale’s proposal for an SOL ETF. Previously, the SEC was reluctant to approve these disclosures. Although the decision on the SOL ETF was delayed in May, the agency still did not reject it. Many regard this delay positively, since it signals that the SEC is carefully exploring the issue.

The approval of an SOL ETF would happen after Bitcoin and Ethereum spot ETFs were approved. In January 2024, authorities approved a spot ETF for Bitcoin, and Ethereum’s was approved in May 2025. In February, CME introduced SOL futures, favoring those who believe a spot ETF is on its way, since futures are often introduced before ETFs.

When the SOL ETF gets approved, it could lead to more investment from institutions and open the door for digital assets in the conventional financial system.

Related Reading: Crypto Use Booms as 32,000 Merchants Now Embrace Digital Payment Systems

Crypto Leaders Slam ‘Gensler-Era’ Clause in High-Stakes CLARITY Act

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  • Crypto firms reject removal of past token exemptions in new draft
  • Stakeholders say provision tied to Gensler’s past SEC enforcement style
  • Congress aims to pass CLARITY Act before August deadline

Crypto stakeholders slammed a controversial provision in the CLARITY Act hours before a House markup. The section under dispute seems to reflect previous SEC administration’s policies, which created concerns about classification of tokens. Industry leaders claim the measure conflicts the Act’s main goal of clear digital asset regulation.

Stakeholders Criticize Gensler-era clause in Clarity Act

Under the new CLARITY Act, a section removes tokens protections issued before its enactment. It requires all securities to be treated the same rather than a case-by-case review which denies the SEC classification powers. Market participants have expressed concerns about the change that it could lead to more unclear regulations.

They claim this approach diminishes goals to establish clear token classification and regulatory duties. Furthermore, there are comparisons between this section and the William Hinman speech that excluded ETH from security status. The speech was major reference in the legal battles for Ripple and its XRP token.

CLARITY Act Passes First Markup

The House Financial Services and Agriculture Committees has passed the CLARITY Act in the first markup in Washington, D.C. Members of Congress hope to finalize digital asset legislation and meet President Trump’s August deadline for crypto regulatory reform. This bipartisan action takes place after last year’s FIT21 and tries to reform digital assets regulation in the U.S.

The new proposal outlines SEC and CFTC jurisdictions as well as the transition of digital assets from securities to commodities. The new rules have sparked mixed opinions in the crypto sector because of provisions similar to the SEC policies under Gary Gensler. The latest version has also removed several exemptions that previously benefited innovators.

Although the bill has been criticized, the Blockchain Regulatory Certainty Act (BRCA) has received a lot of support. Eight blockchain firms like Uniswap, support BRCA to protect developers of non-custodial blockchain software. It ensures the developers are not subjected to financial rules tied to intermediaries.

SEC Changes Regulatory Tact

Paul Atkins, the SEC chair, has endorsed decentralized finance and crypto self-custody rights. He stated that the SEC is drafting conditional exemptions for DeFi platforms to make it easier for them to meet compliance needs. The efforts show a shift in direction from previous enforcement strategies.

Stakeholders insist that clear legislation should explain the SEC’s duties, ensure self-custody of assets, support DeFi and tackle centralized trading. They claim that uncertainty could lead companies to move their innovation to countries with clearer regulations. Therefore, they want Congress to avoid provisions that reflect outdated enforcement practices.

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Congress Unveils New CLARITY Act Draft Impacting Crypto Regulation in 2025

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  • Congress unveils a new CLARITY Act draft aimed at providing regulatory clarity for crypto, especially DeFi and blockchain developers.
  • Developers and wallet providers not controlling networks are exempt from being classified as money transmitters, easing compliance burdens.
  • The bill also permits banks to use blockchain and digital assets while defining clear regulatory roles for the SEC and CFTC.

Congress is gearing up for significant moves in cryptocurrency regulation, as a recent draft of the CLARITY Act has just been released, setting the stage for an important markup session this Tuesday.

The updated version, formally called the Amendment like a Substitute (ANS), refines the original CLARITY Act proposal. FOX Business reporter Eleanor Terrett recently highlighted on X that this latest draft will be the focal point for the House Financial Services Committee’s discussion this week.

There are two versions of the bill in play: one from the House Financial Services Committee and another from the House Agriculture Committee. Both committees plan to review and amend their respective drafts independently before merging them into a unified final bill.

What makes this new draft particularly notable is its more crypto-friendly stance toward developers and decentralized finance (DeFi) platforms. As crypto analyst Franc Corva pointed out on X, the bill exempts blockchain developers who don’t have control over the network from being classified as money transmitters. This means many developers and wallet providers won’t face stringent regulatory burdens under this law.

Congress Backs DeFi Freedom in New Crypto Bill

Additionally, the bill protects DeFi activities and software that allow users to hold their private keys from heavy-handed regulation. Bank Secrecy Act rules would only apply to centralized intermediaries, leaving decentralized projects with more operational freedom.

The bill also introduces updated banking provisions in Sections 312(b) and (c), permitting national banks and insured state banks to utilize digital assets and blockchain technology in delivering legal services, provided they comply with existing regulations.

At its core, the CLARITY Act seeks to clearly define how U.S. laws apply to various types of cryptocurrencies, whether Bitcoin, Ethereum, stablecoins, or others. Importantly, it delineates regulatory authority between the SEC and the CFTC, offering much-needed clarity to crypto businesses about who oversees what.

This latest version is being seen as a positive development by industry insiders, providing a clearer, more predictable framework for innovation, compliance, and growth in the crypto sector.

Congress Reviews Bill to Create Strategic Bitcoin Reserve

In parallel, the U.S. Congress is also considering another groundbreaking bill, H.R. 3798, introduced by Representative Tim Burchett. This legislation aims to make the Trump administration’s vision of a strategic Bitcoin reserve official policy, potentially enabling the government to accumulate and hold Bitcoin as part of its financial assets.

The Bitcoin reserve bill is currently under review by the House Financial Services Committee. Proponents argue it could boost economic strength and accelerate crypto adoption nationwide, while critics remain cautious due to Bitcoin’s well-known price volatility.

As Congress moves forward with these measures, the crypto industry watches closely, hopeful that clearer regulations and innovative policies will help propel digital assets into the mainstream economy.

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Gemini Files S-1 With SEC, Eyes US IPO After Circle’s NYSE Success

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  • Gemini files confidential S-1 with SEC after Circle’s NYSE success
  • IPO details like share volume and price remain undisclosed
  • IPO timing depends on SEC review and overall market conditions

Gemini, a leading crypto exchange, has submitted a draft S-1 registration with the U.S. Securities and Exchange Commission (SEC). This decision shows that the company plans to offer its shares to the public through an initial public offering in the United States. This achievement is after Circle’s successful NYSE debut, which raised over $1 billion.

The Winklevoss-led company has not shared the planned offering size or the price range for its Class A common stock. Nevertheless, the exchange confirmed that the IPO will take place after the SEC reviews the documents. The state of the market will determine the debut of the IPO.

Gemini’s IPO Follows Circle’s Success

Gemini’s announcement comes amid renewed momentum for crypto firms that are interested to enter public markets. Circle’s share price rose 160% on the first trading day, making the sector more optimistic. Gemini is in a position to benefit from positive changes in the market and regulations.

Tyler and Cameron Winklevoss have not issued public statements after the submission of the draft. However, the timing indicates that the decision was made to meet the rising institutional interest. The company is now preparing to compete with leading firms that want to go public.

In March, Bloomberg said that Gemini was considering a public offering as soon as this year. That speculation increased after Circle’s IPO attracted a lot of interest from investors and delivered major early results. As the market sentiment changes, more crypto companies might decide to follow Gemini.

U.S Market Expansion

The crypto exchange has tried to grow its compliance system and build the trust of institutions. Gemini is licensed in several U.S. states and established partnerships with companies in other countries. This approach may address regulatory issues before the company goes public.

The exchange has benefited from the Trump administration’s policy which promotes new developments in digital assets. The new SEC leadership has eased the legal burden on crypto companies. Therefore, regulators seem more open to compliant crypto companies.

IPO Success Hinges on Market Conditions

If Gemini’s IPO is successful, it could be a major step for the U.S. crypto sector. It happens as Coinbase, the largest U.S. crypto exchange, remains active in the public markets. The Gemini filing indicates interest in investing in crypto equity.

Analysts believe that more IPOs will happen if the present conditions continue. If Circle’s IPO is successful, it could motivate other companies to file for IPOs. The market anticipates the SEC’s response to Gemini’s proposal and additional information about the offer.

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Approval on Canary Spot SUI ETF Frozen as SEC Extends Review Clock

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  • The US SEC has postponed its decision on the proposed Canary Spot SUI ETF.
  • SUI ETF aims to track the price of the SUI token from the Sui blockchain.
  • SEC stated the delay is due to unresolved concerns about market manipulation and investor protection.

The US Securities and Exchange Commission has postponed its decision on the proposed Canary Spot SUI ETF. The application aimed to introduce a spot ETF tracking the SUI token from the Sui blockchain. The delay extends the uncertainty around regulatory approval for new crypto-based investment products.

Canary Spot SUI ETF Faces Postponement

Canary proposed a spot ETF that would simply track the market price of SUI. The SUI token is used as the blockchain fuel for the Sui Blockchain, which is meant to be scalable and have superfast transactions. The SEC has now extended its review timeline for the SUI ETF filing.

The agency usually uses the full extent of its legal window to evaluate these proposals. This process involves technical input, legal documentation, and public feedback. Canary joins the ranks of other firms hoping to make spot crypto ETF decisions.

Sadly, Canary’s application is the first known attempt to register an ETF referencing the price of SUI. There are already several crypto ETFs out there, but most of them trade futures rather than spot assets. The greater amount of market exposure afforded by spot ETFs means there is increased regulatory scrutiny along these lines.

SEC Maintains Strict Standards on Spot ETFs

The SEC cited price manipulation, in particular, and lack of investor protection as issues. However, like other spot ETFs for leading digital assets, these matters have previously led to delays. The agency indicated that before it can approve these risks, they requires further analysis.

By contrast, it has been behind the approval of some futures-based ETFs tied to cryptocurrencies. Because these products don’t involve holding the actual token, the price is much harder to artificially manipulate directly. However, spot ETFs like the proposed SUI ETF demand different oversight and infrastructure.

The SEC prefers controlled growth of the digital asset sector. When considering new ETF structures, it mostly relies on legal precedent and market stability. This approach is in line with how the company has dealt with novel crypto products in the past.

Crypto Community Divided Over SUI Delay

Meanwhile, several participants in the digital asset market had anticipated the delay, as the SEC had not made any progress in clearing their doubts. There were also concerns about reduced momentum in crypto-related innovation inside the US. However, some saw the review as part of the regulatory compliance process.

The SUI token showed minimal price movement following the announcement. Market analysts consider that the delay was expected and that an immediate decision is not expected. There is no fixed date for a decision, hence suspending the market direction.