SEC Crypto ETF Delays: What the Data Suggests for November Approvals

The Shutdown’s Unintended Consequence

October was supposed to be the month of reckoning for crypto ETFs. The market had circled the dates, analysts had placed their bets, and the Securities and Exchange Commission (SEC) was set to deliver a series of highly anticipated verdicts. Instead, we got silence. A government shutdown descended on Washington, and the gears of the regulatory machine ground to a halt. The deadlines came and went, meaningless artifacts of a timeline that no longer existed.

But in the vacuum left by regulatory paralysis, a strange and unexpected mechanism has whirred to life. A handful of issuers, tired of waiting for a formal blessing, have found a procedural backdoor. By filing updated S-1 registration statements with a specific piece of legalese—"no delaying amendment" language—they've effectively started a 20-day countdown clock. Under U.S. securities law (specifically Section 8(a) of the Securities Act of 1933), these filings automatically become effective after that period unless the SEC actively intervenes to stop them.

And for four funds, the SEC did nothing. Two from Canary Capital, one from Bitwise, and one from Grayscale simply… went live. They didn't receive a celebratory press release from the commission or a stamp of approval. They became effective by default. It was the regulatory equivalent of winning a race because your opponent never left the starting block. This is not the grand regulatory embrace the industry has been clamoring for; it’s a win on a technicality. A quiet, almost anticlimactic arrival.

This initial success, however minor, has been interpreted as a signal. The logic appears to be: if the SEC is unable or unwilling to act, the door is open. The question now is, for how long? And for whom?

A Calculated Gamble on Inaction

The success of the first four funds has triggered a new wave of filings. On Thursday, Fidelity put an updated S-1 for its spot Solana ETF into the system. Canary Capital followed suit with its XRP ETF. Suddenly, the market is buzzing with the possibility of an XRP fund trading as soon as November 13, leading to a new consensus: for Crypto ETFs: November Could Be the New October for U.S. After Shutdown Delays SEC Decisions.

This entire strategy is a high-stakes bet on continued regulatory inaction. It’s like a ship captain deciding to sail out of a heavily controlled harbor while the harbormaster is on an extended lunch break. The channel is clear for now, but if the harbormaster returns to his post early and sees an unauthorized vessel, he has every tool at his disposal to force it back to the dock. The issuers are betting the lunch break lasts just long enough for them to reach open water.

I've looked at hundreds of these filings over the years, and this "approval by inaction" gambit is a fascinating, if precarious, strategy. Its success hinges on a critical variable: the SEC's prior engagement with a specific filing. As Bloomberg analyst James Seyffart noted, funds tied to assets like Solana, HBAR, and Litecoin have already been through rounds of feedback with the commission. The paperwork is familiar. The SEC staff, even while furloughed, knows what’s in the box.

The XRP application is the outlier. It’s the true test of this backdoor strategy. The SEC has a long, contentious history with Ripple and XRP, and it has reportedly engaged very little with this specific ETF prospectus. Filing this now is an audacious move. It presumes the commission is so paralyzed that it will allow a product with a complex and litigious history to slide through uncontested. Is this a brilliant exploitation of a bureaucratic loophole, or a profound miscalculation of the SEC’s latent power? What happens when the government reopens and the agency is once again fully staffed, tasked with cleaning up a series of de-facto approvals it never intended to grant?

The market seems to be pricing this development as a definitive win, a sign that the floodgates are opening. But the data suggests a more fragile reality. We have a small sample size—four funds, to be exact—that have successfully navigated this path. Projecting that success onto a fundamentally different and more controversial application like an XRP ETF feels less like sound analysis and more like wishful thinking. The risk isn't just that the SEC could issue a stay on one specific fund; it's that it could issue a blanket statement clarifying its position, effectively shutting the backdoor for everyone.

The Illusion of a Green Light

The current excitement around crypto ETFs feels misplaced. The market is cheering the outcome—new products are trading—without properly scrutinizing the process. This isn't a policy shift. It's the exploitation of a temporary system failure. We are not witnessing a deliberate, well-reasoned acceptance of crypto assets into the mainstream financial system. We are watching savvy lawyers and product managers take advantage of an empty office in Washington. This momentum is built not on a foundation of regulatory clarity, but on the sands of political dysfunction. The real test isn't whether more funds can launch in November; it's what happens when the SEC finally gets back to work.