- The SEC rejected two spot Solana ETF applications due to concerns about classifying Solana (SOL) as a security.
- Despite this setback, issuers like VanEck and 21Shares remain determined to pursue regulatory approval.
The U.S. Securities and Exchange Commission (SEC) has once again tightened its stance on cryptocurrency-related financial products, this time rejecting two 19b-4 applications for spot Solana (SOL) ETFs. The applications, submitted by Cboe BZX on behalf of undisclosed issuers, were withdrawn from Cboe’s website following the SEC’s rejection, leaving market participants and issuers grappling with the regulatory uncertainty surrounding Solana.
Solana’s Security Status at the Core of SEC’s Decision
The main point of contention lies in the SEC’s ongoing classification of Solana (SOL) as a security, which played a crucial role in the rejection of the applications. The SEC had previously indicated its concerns regarding SOL’s classification in court documents, adding weight to its decision to halt the approval process. Due to these issues, the applications never reached the Federal Register, a crucial step required to begin the SEC’s approval or rejection timeline.
A 19b-4 application typically starts the clock on the SEC’s review process once it is added to the Federal Register. However, in this case, the applications were withdrawn before reaching that stage, reflecting the uphill battle faced by issuers aiming to bring spot Solana ETFs to the market.
The Status of Current Solana ETF Applications
Despite this setback, interest in launching spot Solana ETFs remains high. Two major players, 21Shares and VanEck, continue to push for SEC approval. However, there are signs of hesitation. The S-1 registration form filed by 21Shares recently disappeared from the SEC’s EDGAR system, raising speculation that the company may be reassessing its approach. In contrast, VanEck’s S-1 form remains active, and the firm’s head of research, Matthew Sigel, confirmed that their application is still in play.
21Shares’ head of communications, Audrey Belloff, offered a careful response to the situation, stating, “We cannot comment on the regulatory process at this time. We remain committed to expanding investor access to cryptocurrencies in the U.S. market and globally,” implying that while challenges persist, the company remains focused on its mission.
What’s Next for Solana ETF Proposals?
The rejection of these 19b-4 applications is undoubtedly a setback, but it’s not the end of the road. Issuers have the option to resubmit their applications with updated arguments and stronger evidence addressing the SEC’s concerns. As regulatory clarity evolves, the door remains open for spot Solana ETFs to eventually gain approval, though the path forward is likely to remain complex and uncertain in the near term.
