SEC Funding Lapse Halts New Crypto ETF Reviews

The US Securities and Exchange Commission (SEC) has entered a funding lapse, halting new reviews of crypto exchange-traded funds (ETFs). The lapse began on October 1, 2026, when the US federal fiscal year started without a budget. This means that new applications for crypto ETFs cannot be declared effective, and comment letters are no longer issued.

Existing listed products, such as BlackRock's IBIT and Fidelity's FBTC, remain unaffected and can still be traded. However, the SEC's funding lapse has suspended the review of new applications, including those from Grayscale. The SEC had approved a generic listing standard for commodity trust shares on September 17, 2025, which allowed eligible products to bypass individual 19b-4 filings, reducing review time from 240 days to about 75 days. However, this standard does not apply to leveraged, inverse, actively managed, lending, or staking products.

Nate Geraci told Decrypt that the industry's term 'ETF Cryptober' may be temporarily put on hold, but this is a delay, not a rejection. The SEC and the US Commodity Futures Trading Commission jointly clarified on March 17, 2026, that protocol staking does not constitute a securities offering or sale. BlackRock's Ethereum product, ETHB, is listed on Nasdaq with a fee of 0.25%, and 82% of staking rewards are distributed to investors.