May 6, 2025
Dear Securities and Exchange Commission, I am writing in support of SR-NASDAQ-2025-005, the proposal to list and trade shares of the CanaryFunds Litecoin ETF. I respectfully urge the Commission to approve this rule change, as the ETF meets the regulatory requirements under Section 6(b)(5) of the Securities Exchange Act of 1934—particularly with respect to preventing fraudulent and manipulative acts and practices. Addressing the SEC’s Core Concern: Market Integrity and Manipulation Prevention The CanaryFunds Litecoin ETF is structured with multiple safeguards specifically designed to mitigate market manipulation and ensure investor protection: Surveillance-Sharing Agreements: The proposal includes robust surveillance-sharing mechanisms between Nasdaq and significant LTC spot markets, similar to those used in approved spot Bitcoin and Ethereum ETFs. This enables real-time monitoring of suspicious trading activity and cross-market abuse. Reliable Pricing Index: The ETF will track the CoinDesk LTX Index, which aggregates data from several high-volume, regulated exchanges. This multi-source approach minimizes the risk of price manipulation on any single venue influencing the ETF’s NAV. Deep Liquidity and Market Dispersion: Litecoin is traded across a diverse set of global exchanges, none of which dominates overall volume. According to Kaiko data, no single venue accounts for more than 15% of LTC's spot trading—an important factor in reducing susceptibility to manipulation. Transparent Custody and Disclosure: The ETF will hold LTC in institutional-grade cold storage with third-party custodians and will provide daily disclosures of holdings and pricing—enhancing transparency and reducing custodial risk. No New or Novel Risk Beyond Existing ETFs Importantly, the regulatory and market structure risks associated with Litecoin are not novel when compared to those already addressed in Bitcoin and Ethereum ETF approvals. Like Bitcoin, Litecoin is a proof-of-work digital commodity with no central issuer, operating for over a decade without interruption. The SEC has previously approved products with similar blockchain structures and surveillance measures. Strengthening Investor Protections By listing a Litecoin ETF, the SEC would provide U.S. investors with a regulated, transparent alternative to offshore or unregulated platforms, significantly reducing the likelihood of retail exposure to fraud, private key loss, and pricing manipulation in opaque markets. The ETF structure brings Litecoin access into a compliant, SEC-regulated environment with enhanced disclosures and governance. Conclusion The CanaryFunds Litecoin ETF addresses the SEC’s concerns regarding fraud and manipulation through a combination of deep liquidity, diversified exchange coverage, robust surveillance-sharing agreements, and institutional-grade custody. It does not present novel regulatory challenges and is consistent with precedents set by previously approved crypto ETFs. Approving this ETF would align with the Commission’s mission to protect investors, maintain fair and orderly markets, and foster capital formation through responsible innovation. Thank you for your time and consideration. Sincerely, A U.S. Investor Supporting Transparent Market Access