Are Solana ETFs Facing an Uncertain Future with the SEC?

• SEC rejected Cboe’s Solana ETF filings over security concerns.
• 21Shares paused efforts; VanEck’s Solana ETF application still active.

The U.S. Securities and Exchange Commission (SEC) has rejected Cboe BZX’s 19b-4 filings for two proposed spot Solana ETFs, according to the reports. This decision led to the removal of the filings from the Cboe website and prevented them from being submitted to the Federal Register, halting any progress toward SEC approval.

The rejections follow discussions between the SEC and ETF issuers regarding concerns that Solana may be classified as a security. This view aligns with the SEC’s stance in various court filings. The 19b-4 forms, which exchanges submit on behalf of issuers to initiate the SEC approval process, were thus never processed by the Federal Register, which would have triggered the approval timeline. 

At present, two issuers are pursuing Solana ETFs: 21Shares and VanEck. 21Shares has seemingly paused its efforts, as its S-1 form no longer appears in the SEC’s EDGAR filing system. In contrast, VanEck’s S-1 form remains visible, and Matthew Sigel, head of research at VanEck, has confirmed that their application remains active.

Despite the setbacks from the 19b-4 rejections, there is potential for reapplications or amendments. Audrey Belloff, head of communications at 21Shares, stated, “We are unable to comment on the regulatory process at this time. We remain committed to expanding investor access to cryptocurrencies in the U.S. market and around the world.”

What does the Future Have in Store?

The SEC’s actions were anticipated given its previous statements on Solana’s security status. Market experts, including Nate Geraci and Bloomberg Intelligence’s James Seyffart, have suggested that Solana ETFs may face extended delays or challenges under the current administration, with potential approval not expected before 2025. Meanwhile, neither VanEck, Cboe nor the SEC provided any official statements on this.

Amid this, SOL is trading at $146.06 with a 2.53% surge and the trading volume is up 18%, this mild surge comes in after a bearish week.

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