The U.S. Securities and Exchange Commission (SEC) has informed multiple firms seeking to launch a Solana (SOL) spot exchange-traded fund (ETF) that their filings will be rejected. According to FOX Business reporter Eleanor Terrett, at least two applicants, including Grayscale Investments, received notice that their 19b4 filings for Solana-based ETFs would not be approved.
This move affects several prominent asset managers, including Grayscale, VanEck, 21Shares, Bitwise, and Canary Capital, who have shown strong interest in bringing Solana-based investment products to market.
The SEC’s decision to block these filings stems from ongoing concerns over Solana’s classification as a security. The agency has repeatedly raised these concerns, especially in prior denial situations like the one we saw in August when the SEC rejected Cboe BZX’s filings for two Solana spot ETFs.
This decision aligns with the SEC’s general stance on digital assets, as the latter pivots to remain the main factor behind the sanitary of volatile non-approval of crypto-based investment products.
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SEC’s Focus on Solana’s Security Status
The SEC’s concerns about Solana’s classification as a security have been a key factor in the agency’s decision-making process. Since its inception, Solana has faced scrutiny over its legal status, with the SEC questioning whether the token qualifies as a security under U.S. laws. If classified as a security, Solana would be subject to additional regulatory requirements, making it more difficult for asset managers to offer investment products based on the token.
Apart from Solana, many more Crypto ETFs are still in limbo as the market has not entirely given the green light. Though the SEC has approved Bitcoin ETFs in the recent past, it has not transferred that flexibility to other coins like Solana. According to Terrett, the SEC is unlikely to approve any new crypto ETFs under the current administration. She emphasized that if one crypto ETF is approved, others will likely follow, similar to the past coordinated launches of Bitcoin ETFs.
The SEC’s rejection of these filings signals a continued regulatory challenge for digital assets in the U.S. It also raises questions about the future of other crypto-based investment products, including those tied to tokens like XRP, which may face similar hurdles.
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Maxwell Mutuma
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. He writes extensively on topics such as blockchain, cryptocurrency, tokens, and more for top publications such as Coingape, Coin Edition, and The Coin Republic. His goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.