Canary Capital, a Nashville-based asset manager, has recently filed an S-1 form with the US Securities and Exchange Commission (SEC) for the establishment of a Litecoin (LTC) exchange-traded fund (ETF). This filing marks the first application for a Litecoin-linked spot ETF in the United States. It comes shortly after Canary Capital’s filing for an XRP ETF on October 8. Steven McClurg, the CEO and founder of Canary Capital, previously served as the Chief Investment Officer at Valkyrie Investments and co-founded the asset management firm with Leah Wald.
Unlike Solana ETF filings, Litecoin is considered to have had a “fair launch” without pre-mining or an initial token sale. Since Litecoin is based on a proof-of-work consensus model and was not offered to the public or private investors, it is less likely to be classified as a security by the SEC. Alex Thorn, the Head of Research at Galaxy Digital, suggests that issuers should have a similar pathway to launch spot-based Litecoin ETFs in the US as they did for Bitcoin.
In contrast, Solana’s blockchain is based on a proof-of-stake consensus algorithm and conducted a token sale, making its initial launch fact pattern distinct from Bitcoin and Litecoin. The SEC’s lawsuit against Coinbase also alleges that SOL (Solana) is a “crypto asset security.” Therefore, the approval of Solana ETFs in the US may require a change in the SEC’s approach to classifying crypto assets as securities, leading some analysts to speculate that ETF filings for SOL are contingent on a Trump victory in November.
Currently, the Grayscale Litecoin Trust (LTCN) dominates the US market, while ETPs such as CoinShares’ LITE in Switzerland and ETC Group’s ELTC in Germany already hold Litecoin. According to a CoinShares report, the combined assets under management (AUM) of LTC funds offered in Europe total $11.5 million, which represents less than 10% of the total AUM of Litecoin-related ETPs globally. The remaining 93% of investments in Litecoin-related ETPs worldwide are allocated to LTCN, which has $127.4 million in AUM.