Key Points
- SEC pauses Solana ETF approval over security classification concerns.
- CBOE BZX Exchange withdraws key filings, delaying the process.
- VanEck remains optimistic, asserting Solana as a commodity.
- Experts suggest ETF approval may depend on future political changes.
The U.S. Securities and Exchange Commission (SEC) has halted the approval process for Solana (SOL) spot exchange-traded funds (ETFs), sparking concern across the crypto community.
This move comes amidst ongoing debates surrounding Solana’s classification as a security, a pivotal issue that has already impacted the launch of these ETFs.
Forms 19b-4 for VanEck and 21Shares Solana ETFs appear to have been removed from the CBOE website.
Documents SR-CboeBZX-2024-066 & SR-CboeBZX-2024-067 aren’t accessible anymore via direct link, and are no longer visible in BZX Pending Rule Changes.
Another interesting thing is… pic.twitter.com/t81kVGJ3uH
— Summers (@SummersThings) August 16, 2024
SEC Halts Solana ETF Process
Recent developments indicate that the SEC’s hesitation is tied to unresolved questions about whether Solana should be categorized as a security. This uncertainty led the CBOE BZX Exchange, which had been instrumental in advancing Solana ETF applications, to withdraw its 19b-4 filings.
These filings are essential for starting the formal approval process for ETFs, and their withdrawal effectively puts the brakes on any immediate decision regarding Solana ETFs.
The removal of these filings was first noticed by a market observer named “Summer” on the social media platform X (formerly Twitter). According to Summer, the relevant documents vanished from both the CBOE website and the Federal Register over the weekend.
Additionally, 21Shares, a prominent ETF issuer, had its S-1 statement pulled from the SEC’s search results, leaving VanEck’s S-1 registration statement as the only remaining application in the SEC’s system.
Solana’s Classification Remains in Question
The SEC’s concerns over Solana’s security status are likely the driving force behind these recent developments.
Historically, the SEC has been strict about how it classifies cryptocurrencies, often treating them as securities, especially in legal actions against major exchanges like Binance and Coinbase.
The current regulatory environment continues to cast doubt on the immediate approval of any Solana-related ETFs.
However, not all hope is lost for Solana ETF proponents. Industry experts speculate that the temporary withdrawal of these filings could pave the way for revised applications.
These updated submissions might include stronger arguments to counter the SEC’s security concerns. VanEck, one of the key players in this space, has remained vocal about its stance, with its head of digital asset research, Matthew Siegel, expressing confidence that Solana should be classified as a commodity, akin to Bitcoin (BTC) and Ethereum (ETH).
Siegel emphasized that evolving legal perspectives might recognize certain cryptocurrencies as securities in primary markets but treat them more like commodities in secondary markets. This nuanced view could be crucial in future debates about Solana’s classification.
Political Influence on ETF Approvals
As the SEC’s scrutiny continues, the fate of Solana ETFs may also hinge on broader political and regulatory shifts. Some analysts, like Bloomberg’s Eric Balchunas, have suggested that Solana ETFs might only secure approval if there is a significant change in the U.S. administration.
James Seyffart, another Bloomberg Intelligence analyst, echoed this sentiment, predicting that approval might not come until 2025, depending on how political landscapes evolve.
Despite these regulatory roadblocks, Solana’s market performance has remained relatively resilient. Over the past month, SOL has seen a modest decline of just over 13%, but its price held steady this week, trading at $161 at press time, up nearly 2% in the last 24 hours.
As the debate over Solana’s classification continues, the crypto community remains watchful, aware that the SEC’s decisions in the coming months could set crucial precedents for the future of cryptocurrency ETFs in the United States.
