SEC funding lapse freezes review pipeline for new crypto ETFs

Huo Xing Finance, citing HOGE Wire, said the U.S. federal fiscal year that began Oct. 1, 2026, opened without an approved budget, pushing the U.S. Securities and Exchange Commission (SEC) into a funding lapse. The disruption has effectively paused reviews of new crypto exchange-traded funds: registration statements cannot be declared effective and SEC staff are no longer issuing comment letters. The halt does not affect products already on the market. BlackRock's IBIT, Fidelity's FBTC and Grayscalerelated offerings remain tradable, with creations and redemptions continuing as normal. Launching a crypto ETF typically requires two parallel steps: a Rule 19b4 filing submitted by the exchange and an S1 or N1A registration statement submitted by the issuer. Both processes are suspended during the funding lapse. The report noted that the SEC on Sept. 17, 2025 approved a generic listing standard for commodity trust shares, enabling eligible products to skip individualized 19b4 filings and cutting review timelines from as long as roughly 240 days to about 75 days. The template does not cover leveraged, inverse, actively managed, lending or staking products. More than 90 applications were still pending as October began, with some deadlines falling in the first days of the month. Nate Geraci told Decrypt that the industry's so-called "ETF Cryptober" could be temporarily delayed, emphasizing the pause is a postponement rather than a rejection. The article also said that on March 17, 2026, the SEC and the U.S. Commodity Futures Trading Commission jointly clarified that protocol staking does not constitute a securities offering or sale. Separately, BlackRock's Ethereum product ETHB is listed on Nasdaq with a 0.25% fee, and distributes 82% of staking rewards to investors.