- SEC has delayed decisions on the Polkadot and Hedera ETFs, pushing back deadlines to June due to an increasing backlog of crypto fund applications.
- The agency emphasizes the need for further review to address concerns raised in the proposals.
The U.S. Securities and Exchange Commission (SEC) has extended the decision deadlines for two major crypto exchange-traded fund (ETF) proposals, specifically for Polkadot (DOT) and Hedera (HBAR). This delay comes amid an overwhelming surge in crypto ETF applications that the SEC is struggling to navigate, leading to a cautious and thorough evaluation process.
New Deadlines Set for June
The SEC announced on Thursday that it would delay its decision on Grayscale’s application to convert its Polkadot Trust into a spot Polkadot ETF until June 11. Similarly, Canary Digital’s Hedera ETF proposal will now face a decision deadline of June 11 as well. These proposals, originally due for a decision by the end of this week, are part of a broader backlog that has caused growing concern among investors and industry experts.
The SEC’s decision to extend the deadline also includes the Bitwise Bitcoin and Ethereum ETF application, which now has a ruling date set for June 10. This string of delays highlights the agency’s cautious approach to assessing digital asset investment vehicles, reflecting ongoing concerns about market innovation and regulatory oversight.
Cautious Approach in the Face of Regulatory Scrutiny
The SEC attributed these delays to the need for additional time to thoroughly review the proposed rule changes and consider the issues raised in the applications. In its filing for the Hedera ETF, the SEC stated that the extended review period would provide the necessary time for addressing concerns and making a more informed decision.
This careful, measured approach is part of a broader trend under the leadership of SEC Chair Paul Atkins, who has overseen an increasing backlog of crypto-related ETF applications. Since taking office, Atkins has had to manage more than 70 applications, reflecting the growing interest in cryptocurrency as an investment asset class.
A Burgeoning and Diverse ETF Backlog
The ETF backlog has become increasingly diverse, with products based on a range of crypto assets from large-cap coins like XRP and Solana to more niche offerings involving meme-themed funds and leveraged products. Bloomberg’s Eric Balchunas recently described the backlog as “wild,” highlighting the inclusion of both traditional digital assets and unconventional products, including novelty funds focused on themes like “Penguins” and “Dogecoin.”
While there was initial optimism that the SEC would adopt a more crypto-friendly stance in 2025, these delays signal that the agency remains cautious and committed to ensuring robust investor protection and regulatory oversight. Industry observers are closely monitoring the upcoming agency roundtable on digital assets, which will address crypto custody—an important issue influencing the fate of pending ETF applications.
In the midst of an ever-growing crypto landscape, the SEC’s careful approach continues to shape the future of digital asset investment products.
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