According to recent insights from FOX Business reporter Eleanor Terrett, the SEC has hinted to at least two companies aiming to launch spot Solana ETFs that their requests are likely to face denial. This comes at a time when the regulatory landscape suggests that new cryptocurrency ETFs may struggle to secure approval anytime soon.
Emerging Interest in Solana ETFs
This situation emerges as several asset managers target the creation of funds that track the spot price of Solana (SOL), the fifth-largest cryptocurrency by market value. Grayscale Investments is making waves by filing to convert its Solana Trust, which currently holds assets worth over $134 million, into a spot ETF called GSOL.
Not to be outdone, notable firms like VanEck, 21Shares, Bitwise, and Canary Capital have also submitted their proposals for Solana ETFs, signifying a growing appetite among fund managers to broaden their portfolios beyond the existing Bitcoin and Ethereum ETFs.
Regulatory Challenges Ahead
The interest in cryptocurrency ETFs isn’t limited to Solana. XRP is also gaining traction, with several companies, including Bitwise, Canary Capital, and WisdomTree, actively pursuing the necessary regulatory approvals.
Yet, the SEC’s assessment of the underlying assets for these ETFs—particularly Solana and XRP—will play a crucial role in their eventual fate. Back in August, the SEC turned down Cboe BZX’s requests for two Solana spot ETFs, raising alarms about whether Solana might be classified as a security.
Possible Future Changes
Under the leadership of SEC Chair Gary Gensler, the agency has adopted a tough stance on cryptocurrency assets. This position suggests that issuers waiting for feedback on Ethereum ETFs shouldn’t be shocked if spot Solana ETF applications meet a similar fate.
Historically, SOL, along with ADA and MATIC, has been viewed as a security in various lawsuits involving major exchanges, such as Binance and Coinbase. However, a recent court filing related to the Binance case hinted that the SEC might take a step back from determining Solana’s security status.
Looking ahead, the expected exit of Gensler next month could pave the way for Paul Atkins, a candidate for SEC chair nominated by former President Trump. If confirmed by the Senate, his leadership could usher in a more favorable attitude toward the approval of spot Solana and XRP ETFs.
Source: Cryptobriefing
