Solana ETF filings face hurdles as SEC rejection looms

Spot Bitcoin and Ethereum ETFs have played a crucial role in driving widespread adoption, providing a simple way for investors to gain exposure to the two largest cryptocurrencies without the complexities of managing a crypto portfolio.

However, new reports suggest that Solana may not follow this path to accessibility due to regulatory hurdles.

Are Solana ETFs Rejected?

Solana Spot ETFs will face disappointment, with the US Securities and Exchange Commission (SEC) notifying at least two of the five potential issuers of the rejection of their 19b-4 filings.

FOX Business’ Eleanor Terrett confirmed that sources suggest the securities regulator is unwilling to approve any new cryptocurrency ETFs under the current administration. This approach aligns with the SEC’s handling of Bitcoin ETFs, where approvals were coordinated across multiple issuers, avoiding selective approval.

Earlier this year, in January, the SEC approved eleven spot Bitcoin ETFs, followed by a series of spot Ethereum ETFs in July. As such, a Solana ETF would further diversify the selection of spot crypto ETFs accessible to investors.

So far, several asset managers have tried to get investment products based on Solana approved, the most recent being Grayscale. According to a filing on Tuesday, the crypto asset manager is looking to convert its $120 million Grayscale Solana Trust (GSOL) into a spot ETF on NYSE Arca,

With this, Grayscale became the fifth asset manager to apply for a spot on the Solana ETF this year. Other big asset managers, including VanEck, 21Shares, Bitwise and Canary Capital, have similarly applied, reflecting significant industry enthusiasm amid a market-wide resurgence, with SOL alone rising more than a 200% this year.

However, concerns about SOL’s classification persist. The SEC rejected Cboe BZX’s proposals for two spot Solana ETFs in August of this year, raising questions about whether SOL qualifies as a security.

Atkins’ appointment to the SEC raises hope

The recent appointment of pro-crypto attorney Paul Atkins as chairman of the SEC, however, has sparked renewed optimism for a more favorable regulatory environment for digital asset products, including Solana ETFs.

Nate Geraci, chairman of the ETF Store, echoed that sentiment in a tweet, stating that the SEC will not approve any ETF filings until Atkins officially takes over as SEC chairman in January. As the current administration winds down, industry veterans predict that regulatory changes, including potential approvals for crypto ETFs, will only accelerate once new leadership takes the helm.

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