Litecoin seen as a commodity, Litecoin ETF likely to appear first under Trump, says expert

Key Takeaways

Litecoin ETF Canary Capital may be the first spot crypto ETF approved by the SEC in 2025.
The CFTC classifies Litecoin as a commodity, distinguishing it from other digital assets that face regulatory challenges.

Canary Capital's Litecoin ETF is well positioned to become the first crypto ETF to be approved by the SEC under the incoming Trump administration, with Litecoin's commodity status, according to Bloomberg ETF analyst Eric Balchunas .

Following Canary Capital's amended S-1 filing yesterday, Nasdaq filed a form 19b-4 to the SEC on Thursday, formally beginning the review process for the Canary Litecoin ETF. The SEC now has 45 days from Federal Register publication to approve or reject the listing, with a possible 45-day extension.

According to Balchunas, the Litecoin ETF application has met the necessary requirements and conditions for approval.

“Litecoin ETF has now checked all the boxes. The first coin ETF of 2025 is on the clock. I don't see any reason why this would be withdrawn either because the SEC issued comments on the S-1, Litecoin is viewed as a commodity and there is a new SEC sheriff in town,” Balchunas write on X Thursday.

Balchunas said Wednesday that the SEC had issued feedback on Canary Capital's S-1 filing for its proposed Litecoin ETF. This prompted the company to introduce the change.

James Seyffart, Balchunas Bloomberg ETF co-analyst, noted that “19b-4 would start the approval/denial clock.

Canary Capital to enter Litecoin ETF S-1 filing with the SEC in October 2023. The amended filing names US Bancorp Fund Services as the administrator of the ETF, with Coinbase Custody Trust and BitGo serving as custodians for the ETF's Litecoin investments.

The CFTC classifies Litecoin as a commodity

The CFTC named Litecoin as an ingredient in its lawsuit against crypto exchange KuCoin, thus exempting it from the SEC's securities regulations.

The CFTC called Litecoin a commodity in a March 2024 filing

The SEC has not taken any official action or made any public statements that definitively classify Litecoin as a security or a security.

Unlike Litecoin, Ripple and Solana have faced special SEC scrutiny. Ripple is still involved in ongoing litigation with the SEC, which keep up that its native token, XRP, is a security.

The SEC has also classified the Solana SOL token as a security in separate cases against Binance and Coinbase. These legal disputes remain unresolved.