SEC ETF delay throws Cardano and Pudgy Penguins fund futures into turmoil

The U.S. Securities and Exchange Commission (SEC) has once again extended its review period for two high-profile cryptocurrency exchange-traded fund (ETF) applications, underscoring the regulator’s ongoing hesitance toward altcoin-related products. In an Aug. 25 filing, the agency announced that rulings on the Canary Spot PENGU ETF and Grayscale’s Spot Cardano ETF would be postponed until October 2025.

The SEC ETF delay marks a continuation of the commission’s cautious approach to digital asset products that fall outside Bitcoin and Ethereum, where spot ETFs have recently gained traction. The extended review period highlights persistent concerns around investor protection, compliance standards, and valuation practices in a rapidly evolving market.

“The Commission finds it appropriate to designate a longer period within which to take action,” the SEC noted in its filing, stressing the need for additional scrutiny.

Canary Spot PENGU ETF under review

The most unconventional of the two proposals, the Canary Spot PENGU ETF, was filed by Canary Capital and seeks to combine Pudgy Penguins (PENGU) memecoin tokens with Pudgy Penguins NFTs. Its original deadline of Aug. 28 has now been pushed back to Oct. 12, 2025.

Analysts say the hybrid structure blending a meme-inspired cryptocurrency with digital collectibles has raised complex questions for regulators. The SEC’s decision to extend the review highlights unease about whether such innovative but speculative products can meet the strict standards applied to traditional ETFs.

Market reaction to the SEC ETF delay was immediate. PENGU’s token price fell by 11% in the hours after the announcement, reflecting skepticism over the ETF’s chances of approval.

“The SEC has been clear that novel structures will face a higher bar,” — Kristin Smith, CEO of the Blockchain Association, said in a statement. “This latest delay reinforces that the commission is not ready to greenlight products that combine volatile assets with uncertain valuations.”

Grayscale’s Cardano ETF also pushed back

Alongside the PENGU decision, the SEC also postponed its ruling on Grayscale’s application to convert its Cardano Trust into a spot ETF. Originally scheduled for Aug. 27, the deadline is now Oct. 26, 2025. The SEC ETF delay places Cardano in the same regulatory holding pattern as other altcoin-focused ETF proposals, including those tied to XRP and Dogecoin.

Grayscale has argued that bringing Cardano into an ETF wrapper would improve transparency, reduce tracking errors, and expand institutional access. However, the SEC continues to cite concerns over market manipulation, liquidity, and investor safeguards.

“Cardano is one of the most actively developed blockchains, but regulatory clarity remains a hurdle,” — James Seyffart, ETF analyst at Bloomberg Intelligence, told clients. “The SEC ETF delay signals that altcoin ETFs will not be a near-term priority.”

Market implications for crypto investors

For crypto investors, the latest SEC ETF delay highlights a clear pattern: while Bitcoin and Ethereum products are slowly moving toward broader institutional adoption, altcoins face a steeper regulatory climb. The uncertainty has already weighed on sentiment, with both ADA and PENGU seeing declines following the news.

Some industry participants, however, see the October deadlines as a potential inflection point. If the SEC consolidates several ETF rulings into a single month, the decisions could significantly shape institutional access to non-Bitcoin crypto assets.

“The clustering of deadlines in October could create a pivotal moment for the ETF landscape,” — Rebecca Rettig, Chief Legal Officer at Polygon Labs, said in an interview. “Investors should expect either a wave of approvals or another round of rejections that reinforce the SEC’s cautious stance.”

Despite short-term price drops, interest in regulated altcoin exposure remains strong. Institutional investors in particular are watching closely, as ETF approval would provide a more secure pathway into assets like Cardano without the complexities of direct token custody. For now, however, the SEC ETF delay underscores how fragile the path to mainstream adoption remains for many digital assets.

Outlook: what comes next

With the SEC ETF delay extending the timeline for both the Canary Spot PENGU ETF and Grayscale’s Cardano ETF, the spotlight now shifts to October 2025. Until then, analysts expect volatility to persist as traders weigh the likelihood of approval against ongoing regulatory headwinds.

For investors, the delays serve as both a cautionary signal and a reminder that crypto’s integration into traditional financial markets is still a work in progress. The SEC’s hesitance may slow the rollout of altcoin ETFs, but it also reflects the regulator’s effort to balance innovation with investor protection.

As the market waits for clarity, the SEC ETF delay has become more than just a procedural matter as it is now a defining factor shaping sentiment around altcoin adoption in the U.S. financial system.