SEC Drowning in ETFtober Filings: 5+ Crypto Funds Hit Desk Amid Shutdown Gridlock – What’s the Fix?
The U.S. Securities and Exchange Commission (SEC) is dealing with a wave of recent crypto exchange-traded fund (ETF) filings, whilst a prolonged government shutdown stalls choices and leaves dozens of merchandise in limbo.
At least 5 new crypto ETFs landed on the SEC’s desk this week alone, displaying the rising rush amongst asset managers to safe approval earlier than the yr ends.
But with the company working beneath skeletal staffing as a result of the shutdown, now in its fourth week, almost all critiques have come to a standstill.
Is the U.S. Entering a New Era of Crypto ETFs or Testing the SEC’s Patience?
The newest entrant got here from VanEck, which on Thursday filed an S-1 type for the VanEck Lido Staked Ethereum ETF. The fund is designed to trace the efficiency of stETH, the liquid staking token issued by Lido, the largest Ethereum staking platform.
VanEck’s submitting notes that the belief “expects to accrue sure staking rewards by way of its possession of stETH,” reflecting the yield-generating nature of Lido’s liquid staking mannequin.
Lido currently holds about 8.5 million ETH, value roughly $31 billion, providing a 3.3% staking yield to depositors. VanEck registered a statutory belief in Delaware earlier this month, indicating early steps towards product launch.
While VanEck expands its staking-based ETF lineup, different issuers are experimenting with extra complicated buildings. On Thursday, 21Shares filed for a leveraged crypto ETF providing 2x publicity to the Hyperliquid token (HYPE), marking one among the extra unconventional filings of the month.
Bloomberg ETF analyst Eric Balchunas described it as “so area of interest… however then you may lookup in 3-4 years it’s bought a number of billion,” calling the present ETF local weather “a complete land rush.”
Cathie Wood’s ARK Invest also added to the pile with three new Bitcoin ETFs earlier in the week.
The ARK Bitcoin Yield ETF will pursue revenue by way of yield-based methods like promoting choices, whereas the ARK DIET Bitcoin 1 and DIET Bitcoin 2 ETFs are structured to offer partial draw back safety with various thresholds tied to Bitcoin’s quarterly value actions.
Meanwhile, Volatility Shares submitted filings for a collection of 3x and 5x leveraged ETFs tied to each crypto and main U.S. shares.
Analysts mentioned the filings included the first-ever 5x ETF proposal in the United States, an aggressive method that has already raised considerations about regulatory compliance with the SEC’s Derivatives Rule (Rule 18f-4), which limits leverage to 2x.
Brian Daly, director of the SEC’s Division of Investment Management, told Reuters that “it’s unclear whether or not these ETFs would comply” with current leverage guidelines.
Government Shutdown Stalls SEC—What Happens to Crypto ETFs Now?
The SEC’s overview course of has successfully halted as the federal government enters its 17th day of shutdown, leaving most of its workers furloughed.
Only a skeleton crew stays to deal with important operations, freezing dozens of pending filings, together with a surge of crypto ETF purposes.
Around 16 crypto ETFs had been awaiting remaining choices this month, with no less than 21 new purposes filed in simply the first eight days of October.
Without congressional motion to reopen the authorities, the backlog is predicted to develop additional, pushing deadlines effectively into November.
The shutdown started on October 1 after Congress did not cross a spending invoice. Republicans are demanding cuts to address the $37.8 trillion nationwide debt, whereas Democrats wish to protect healthcare applications and tax credit.
Until a decision is reached, the SEC can not subject approvals or publish remaining orders.
Additionally, simply earlier than the shutdown, the SEC had moved to streamline crypto ETF approvals. In September, it voted to let the NYSE, Nasdaq, and Cboe Global Markets adopt generic listing standards for digital asset and spot commodity ETFs.
The @SECGov has instructed issuers to withdraw $LTC, $XRP, $SOL, $ADA, $DOGE ETF filings after new generic itemizing requirements reshaped the path for crypto ETFs. #CryptoETFs #SEC #ETFs https://t.co/2QNm6PmQqe
— Cryptonews.com (@cryptonews) September 29, 2025
The rule change, first outlined in July, supposed to cut approval timelines from 240 days to 75 days, decreasing the want for twin filings from asset managers and exchanges.
The reform might quickly open the door for ETFs monitoring Solana and XRP, however for now, filings akin to 19b-4 types and S-1 registrations stay frozen.
ETF Inflows Surge Despite Regulatory Pause
Despite the ongoing administrative slowdown, world urge for food for crypto ETFs stays sturdy.
New knowledge from ETFGI exhibits complete ETF assets climbed to a record $12.7 trillion at the finish of September, up 22.7% from $10.35 trillion at the shut of 2024.
In September alone, U.S. ETFs attracted $152.5 billion in web inflows, the second-highest month-to-month complete on file. That pushed year-to-date inflows to $951.27 billion, already surpassing final yr’s full-year file of $740.78 billion.
The knowledge added that ETF belongings have now recorded 41 consecutive months of web inflows, indicating constant investor confidence regardless of greater rates of interest and market volatility.
Balchunas noted that ETFs might attain $1 trillion in belongings by the finish of the week, given a current tempo of $30 billion in weekly inflows.
Among standout performers, BlackRock’s iShares Bitcoin Trust (IBIT) has generated roughly $245 million in fees in just 22 months, making it the agency’s most worthwhile ETF so far.
With $97.8 billion in belongings, IBIT is on observe to grow to be the first ETF to cross the $100 billion mark sooner than any in historical past.
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