The U.S. Securities and Exchange Commission (SEC) is applying the brakes on the expansion of crypto-based exchange-traded funds beyond Bitcoin, postponing its decisions on two highly anticipated altcoin products. Filings released on August 25 confirm that verdicts for the Canary Spot PENGU ETF and Grayscale’s Spot Cardano ETF have been deferred to October 2025, signaling a more profound regulatory examination for the burgeoning digital asset class.
This move injects a dose of uncertainty into the market, highlighting the regulator’s cautious and methodical approach to products involving more nascent or complex crypto assets.
The PENGU Puzzle: Memes, NFTs, and Regulatory Scrutiny
The proposed Canary Spot PENGU ETF, managed by Canary Capital, has captured market attention due to its novel hybrid structure. The fund aims to hold a combination of PENGU memecoin tokens—the native token of the Pudgy Penguins community—and their corresponding Pudgy Penguins NFTs.
This unique blend presents significant challenges for regulators, particularly concerning:
- Valuation: Establishing a reliable and consistent valuation for illiquid and volatile assets like NFTs.
- Compliance: Ensuring adequate investor protection for a product tied to the memecoin sub-sector.
- Custody: Addressing the technical and security complexities of holding both fungible tokens and NFTs.
The SEC’s decision to push its deadline from August 28 to October 12, 2025, underscores these concerns. The commission stated it “finds it appropriate to designate a longer period” to conduct a thorough review. The market reacted swiftly to the news, with the PENGU token price falling by 11% as investors recalibrated their expectations for a swift approval.
Cardano’s Path to a Spot ETF Lengthens
In a parallel move, the SEC has also delayed its ruling on Grayscale’s application to convert its Grayscale Cardano Trust into a spot Cardano (ADA) ETF. The new deadline is now October 26, 2025, extended from the original date of August 27.
The delay for a well-established asset like Cardano, backed by a major institutional player like Grayscale, indicates that the SEC’s hesitation extends beyond niche products. The regulator cited familiar concerns around market structure and investor protections, a rationale it has consistently applied to other altcoin ETF filings, including those for XRP and Dogecoin.
Market Outlook: A Delayed Verdict, Not a Final ‘No’
While the delays have tempered short-term sentiment for PENGU and ADA, the institutional appetite for regulated crypto exposure remains robust. Analysts interpret the SEC’s tactic not as an outright rejection but as a consolidation of decision-making.
By aligning the deadlines, the SEC is potentially setting the stage for a series of landmark decisions in October 2025. This future date will be a critical inflection point for the industry, potentially unlocking significant institutional capital for the broader altcoin market or reinforcing the high regulatory barriers to entry. For now, the crypto industry remains in a holding pattern, with all eyes fixed on the commission’s next move.
Disclaimer: This article is provided for informational purposes only and does not constitute financial advice. Investors should always conduct their own thorough research and consult with a qualified financial advisor before making any investment decisions in cryptocurrencies, which are highly volatile and speculative assets.
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