As a seasoned researcher with a keen interest in digital assets and their regulatory landscape, I find myself both intrigued and concerned by the current state of Solana ETFs. The recent rejections of 19b-4 filings by the SEC have cast a shadow over the prospect of easy access to Solana for mainstream investors.
Investment products like Bitcoin and Ethereum ETFs (Exchange-Traded Funds) have significantly contributed to the increased popularity of these cryptocurrencies. By offering a straightforward method for investors to invest in the top two digital currencies, without the need for the intricacies of handling a crypto wallet, these ETFs have made it easier for a broader audience to participate in the crypto market.
Contrarily, recent findings indicate that Solana might deviate from its path towards accessibility owing to regulatory hurdles.
Solana ETFs Set to Be Rejected?
It appears that ETFs based on the Solana cryptocurrency may disappoint investors, as the U.S. Securities and Exchange Commission (SEC) has informed at least two out of the five potential issuers that their applications for filing under Rule 19b-4 have been denied.
According to reports from FOX Business’s Eleanor Terrett, it appears that officials at the securities regulator are leaning against granting approval for any new cryptocurrency exchange-traded funds (ETFs) during this administration. This stance seems consistent with the Securely and Exchange Commission’s (SEC) handling of Bitcoin ETFs, which involved coordinated approvals among multiple issuers to prevent selective approval.
Previously, in January and again in July, regulatory approval was given for eleven Bitcoin and seven Ethereum exchange-traded funds (ETFs). If an Exchange Traded Fund focused on Solana gains approval, it would provide investors with even more variety when it comes to investing in cryptocurrency spot ETFs.
To date, several investment managers have aimed to obtain approval for products tied to Solana, with Grayscale being the latest. As per a recent filing, Grayscale intends to transform its $120 million Grayscale Solana Trust (GSOL) into a traditional ETF that will trade on NYSE Arca.
This development marks the fifth application for an ETF spot on Solana from asset managers this year, with Grayscale joining the ranks of other major players like VanEck, 21Shares, Bitwise, and Canary Capital. The surge in applications underscores the growing industry interest as the market experiences a renewed vigor, with SOL witnessing an impressive rise of more than 200% this year alone.
Nevertheless, there are ongoing debates about the categorization of SOL. This year in August, the SEC declined the proposals from Cboe BZX for two Solana ETFs, expressing uncertainty if SOL should be considered a security.
Atkins’ SEC Appointment Sparks Hope
The selection of crypto supporter Paul Atkins as SEC chairman has rekindled hope for a friendlier regulatory landscape towards digital assets like Solana ETFs, which could potentially benefit from his appointment.
Nate Geraci, president of the ETF Store, shared a similar view on Twitter, suggesting that the Securities and Exchange Commission (SEC) won’t greenlight any ETF applications until Gary Gensler officially assumes the role as SEC Chair in January. As the current administration nears its end, experts in the financial industry predict that regulatory modifications, including possible approvals for cryptocurrency ETFs, may happen more swiftly once fresh leadership steps in.
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2024-12-06 18:58