Why SEC Freezes Hedera and Polkadot ETFs

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The U.S. Securities and Exchange Commission (SEC) has decided to postpone its verdict on several highly anticipated crypto-based exchange-traded fund (ETF) proposals. This includes spot ETF applications tied to Polkadot (DOT), Hedera (HBAR), and a dual Bitcoin-Ethereum fund proposed by Bitwise.

The new deadline for decisions? Mid-June 2025 — meaning the next two months will be crucial for investors and institutions looking for broader access to altcoin exposure via regulated financial instruments.

What’s the Holdup? Regulatory Red Tape Tightens

According to the SEC, the delays are routine and aim to provide the agency with “sufficient time to consider the proposed rule changes and comments received.”

But there’s more to this than just paperwork. The influx of new ETF applications — more than 70 currently under SEC review — shows mounting pressure from asset managers and institutional players aiming to replicate the success of spot Bitcoin and Ethereum ETFs, which were greenlit earlier in 2024 and saw record-breaking inflows.

“Approving new ETFs too fast without careful review could pose risks,” said one legal expert familiar with SEC internal processes. “But delaying them indefinitely sends a mixed signal to an industry hungry for clarity.”

SEC ETF delay — Hedera and Polkadot ETFs

Market Reaction: Investors Stay Bullish Despite Delay

Despite the bureaucratic stall, the market appears undeterred. Following the SEC’s announcement:

Polkadot (DOT) jumped 6.9%, reaching $8.16
Hedera (HBAR) rose 4.8%, currently trading at $0.112

The uptick suggests investor confidence hasn’t waned. In fact, many view the delay as simply a procedural step, rather than a red flag.

“Delays are frustrating but not unexpected,” said an analyst from Ark Invest. “The fact that these ETFs are still on the table is a strong signal in itself.”

Spotlight on the Proposals: What’s at Stake?

Let’s break down the delayed ETF submissions:

Grayscale’s Polkadot Trust: Seeks to convert the trust into a spot ETF, aiming to offer traditional investors exposure to DOT without owning the asset directly.
Canary Capital’s Hedera ETF: A new entrant proposing a fund tracking the spot price of HBAR, Hedera’s native token.
Bitwise Dual BTC-ETH ETF: An innovative dual-asset ETF meant to combine exposure to the two biggest cryptocurrencies into a single regulated vehicle.

While these proposals cater to different investor appetites, they share a common goal: legitimizing crypto assets through trusted financial structures.

Bigger Picture: Could Altcoin ETFs Be the Next Wave?

The SEC’s delay underscores a broader regulatory balancing act. After approving spot Bitcoin and Ethereum ETFs, the spotlight has shifted to whether altcoins like Polkadot and Hedera can earn similar treatment.

Historically, the SEC has maintained a strict definition of what constitutes a “security,” which complicates the approval process for ETFs involving altcoins. Still, the momentum around ETF innovation has never been stronger.

Should these proposals receive approval, it would mark a turning point for mainstream adoption, one where crypto projects beyond Bitcoin and Ethereum can enter traditional portfolios through compliant vehicles.

Conclusion

While the SEC’s delay may feel like déjà vu for crypto enthusiasts, it reflects the agency’s cautious approach to balancing innovation with investor protection. The postponement of Polkadot, Hedera, and dual crypto ETFs is not a denial — it’s a pause in a broader regulatory evolution. As June 2025 approaches, the crypto world will be watching closely.

Approval could usher in a new chapter for altcoin legitimacy and broaden access to decentralized technologies through trusted financial gateways. Until then, optimism brews quietly beneath the surface, hinting that the next ETF breakthrough may be just a vote away.

Frequently Asked Questions (FAQs)

What ETFs did the SEC delay?

The SEC delayed decisions on ETFs tied to Polkadot (DOT), Hedera (HBAR), and a dual Bitcoin-Ethereum ETF from Bitwise.

Why did the SEC delay these decisions?

The SEC cited the need for additional time to assess the proposals and review public comments. These delays are common in ETF approval processes.

When will the new decisions be made?

The extended deadlines are now set for June 10 and 11, 2025, unless further delayed.

Did the delay negatively impact prices?

No. Both DOT and HBAR saw modest gains following the news, suggesting investor confidence remains intact.

Glossary of Key Terms

ETF (Exchange-Traded Fund): A financial product that tracks the value of an asset or group of assets, which is traded like a stock on traditional exchanges.

Spot ETF: An ETF that directly holds the underlying asset instead of futures contracts.

19b-4 Filing: A formal request made to the SEC by exchanges or fund managers seeking approval for new ETFs or rule changes.

SEC (Securities and Exchange Commission): The U.S. regulatory authority responsible for overseeing securities markets, including ETF approvals.