Canary Capital Files for Litecoin ETF

Canary Capital has submitted a registration statement with the U.S. Securities and Exchange Commission (SEC) for a Litecoin exchange-traded fund (ETF), shortly after filing for an XRP product.

The firm submitted an S-1 registration statement on Tuesday, aiming to provide exposure to the price of Litecoin (LTC) held by the Trust. As of now, a custodian and administrator have not been disclosed.

Founded by Steven McClurg, who previously established Valkyrie Funds, Canary Capital emphasizes Litecoin's significant role in the cryptocurrency ecosystem, targeting institutional investors.

In their statement, the firm mentioned, “Litecoin presents a unique and compelling opportunity for investors seeking exposure to a time-tested and reliable cryptocurrency.” They highlighted Litecoin's robust track record, having maintained 100% uptime since its inception, showcasing its security and reliability.

James Seyffart, a Bloomberg ETF analyst, noted that some products already hold Litecoin, including offerings from CoinShares in Switzerland and a Grayscale trust in the U.S. He suggested that Litecoin might share a regulatory status similar to Bitcoin's, given its origins as a Bitcoin fork.

However, Seyffart cautioned that for an ETF to be approved under the current administration, a sizeable, liquid, federally regulated futures market for Litecoin is necessary, which is currently lacking.

The upcoming presidential elections may influence the regulatory landscape. Seyffart indicated that a potential Trump victory could lead to changes in SEC leadership, which might favor the cryptocurrency industry. He mentioned the need for a 19b-4 filing to initiate the SEC's approval process.

In addition to the Litecoin ETF, Canary Capital has filed for an XRP ETF, alongside Bitwise. Notably, a spot XRP ETF has not yet received SEC approval, and it could face hurdles given the SEC's ongoing legal issues with Ripple concerning the sale of XRP as an unregistered security.