SEC Delays Decision on Grayscale and T. Rowe Price Crypto ETF Proposals - Regulatory Gridlock Continues

The U.S. Securities and Exchange Commission just hit the snooze button—again.

Major ETF Hopes Deferred

Grayscale and T. Rowe Price join a growing queue of asset managers left waiting at the regulator's door. The SEC's latest delay signals continued caution—or perhaps strategic hesitation—as institutional demand for crypto exposure builds. No new timeline was given, just another extension for review.

The approval process for spot crypto ETFs remains a regulatory marathon, not a sprint. Each postponement fuels speculation about the agency's ultimate stance. Are they building a meticulous framework, or simply kicking the can down a very long road? Industry watchers parse every delay for hints of an underlying strategy.

Market Impact and Institutional Patience

These delays don't exist in a vacuum. They hold back billions in potential institutional capital waiting for a regulated on-ramp. The longer the wait, the louder the argument grows that the U.S. is ceding ground to more agile financial hubs. Traditional finance titans are learning that in crypto, even their influence moves at blockchain speed—sometimes painfully slow.

One cynical take? The SEC's filing fee department must be thrilled with all this extra paperwork. For the rest of the market, it's another lesson in regulatory patience—a virtue that's wearing very thin.

What's next? More waiting, more speculation, and a market that's learning to price in regulatory friction as a permanent cost of doing business. The path to a spot crypto ETF remains clear in theory but bogged down in practice. The clock keeps ticking.

PENGU and T. Rowe proposals reviewed under the SEC’s 19b-4 process. 

Per the federal submissions, the SEC has pushed up its initial review window by up to 45 days for the two ETFs, resonating the delay to a purported “evaluation” of the products’ market structure, investor protection, and the loopholes for price manipulation.

“The commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change,” the SEC statement read.

The Canary PENGU ETF proposal was first submitted in mid-2025, with the Cboe BZX Exchange forwarding a proposed rule change with the SEC under Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 in June last year. 

As reported by Cryptopolitan, the filing sought approval to list and trade shares of the ETF under BZX Rule 14.11(e)(4), which governs commodity-based trust shares. It was later revised on July 7, when the exchange submitted its first amendment to replace the original proposal in full. 

The SEC’s review clock officially started when Amendment No. 2 was filed a day later and then published in the Federal Register on July for public comment. The commission used its power under Section 19(b)(2) of the Act to extend the time it had to approve, disapprove, or start new proceedings by August.

The SEC instituted formal proceedings towards the end of September to determine if the proposed rule change should be approved or rejected, slating the decision date to January 2026.

The Canary PENGU ETF seeks to track the nonfungible token ecosystem, which now has utility tokens, licensing, and digital branding rights. Pudgy Penguins launched on the ethereum blockchain in 2021 and became one of the most recognizable NFT collections in the market. Market anticipation and the capitalization uptrend in the NFTs drove the PENGU collection’s floor price to an all-time high of nearly 36.3 ETH.

However, the NFT floor prices dropped by almost 50% when its native token launched, a factor the SEC says makes it unclear if it’s suitable for an ETF. A green light could show how far the US financial regulator SEC is willing to go in allowing memecoins and NFT exposure through regulated investment products. 

On the other end of the query, the T. Rowe Price Active Crypto ETF is a different kind of problem for the commission. According to the company’s filing with the SEC issued last October, the proposed ETF would be actively managed and invest in up to 15 digital assets, taking a step further from the “base” Ethereum and Bitcoin spot products.

Baltimore-based asset management firm T. Rowe Price is known for its mutual funds and retirement products, and its entry into crypto management is a welcome surprise to the US market.

Grayscale options ETF acknowledged, seeks exposure to BTC, ETH, XRP, SOL, ADA

The SEC also acknowledged a separate filing from NYSE American made around the same time as the PENGU ETF, seeking approval to list standardized options on the Grayscale CoinDesk Crypto 5 ETF composed of Bitcoin, Ethereum, XRP, Solana, and Cardano.

The proposal has reportedly entered the public comment phase, allowing traders, exchanges, and investors to submit views on whether listing options on the fund in tandem with Exchange Act requirements. 

Crypto ETFs options are a rough area for the SEC because they add leverage and derivatives trading to the already volatile underlying assets. 

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