SEC Expresses Concerns Over Solana Spot ETF, Approval Process Halted: Bad News
The U.S. Securities and Exchange Commission (SEC) has recently raised concerns regarding the nature of Solana (SOL) as a security, leading to a stoppage in the approval procedure for Solana spot Exchange-Traded Funds (ETFs) applications.
According to a latest report by TheBlock, the SEC body discussed these raised concerns with the Solana Spot ETF applicants, leading to significant developments in the crypto investment space.
The SEC, after discussions with the Chicago Board Options Exchange (Cboe), decided not to submit the relevant 19b-4 form, which is necessary to initiate the approval process for a new ETF. This decision effectively stalls any forward movement on Solana spot ETFs, highlighting the regulatory uncertainty surrounding cryptocurrencies and their classification.
VanEck and 21Shares ETFs Decision Impacted
VanEck, a prominent investment management firm, had previously filed an S-1 registration statement for a Solana spot ETF product. Despite the SEC’s decision, VanEck’s S-1 statement remains on display, keeping the possibility of future approval alive, albeit under more favourable regulatory conditions.
But 21Shares, another significant player in the ETF market, has withdrawn its registration statement, signalling a retreat in the face of the SEC’s concerns.
Regulatory Challenges for Solana ETF Approval
Nate Geraci, the ETF store president & a well-known commentator in the ETF industry, shared his scepticism about the latest regulatory developments around Solana spot ETF applications.
He said that Solana spot ETF & other similar products approval under the current administration is almost not possible. Geraci noted that the Biden administration’s regulatory stance has been cautious regarding cryptocurrencies, particularly when it comes to classifying certain cryptocurrencies as securities.
It is worth noting that the U.S. SEC has already labelled Solana (SOL) cryptocurrency as an unregistered security token during legal actions against multiple crypto firms. Although Ethereum was also initially classified as a security token, the SEC later gave the green light for Ethereum spot ETF applications with full legal clarity.
