According to a report by FOX Business journalist Eleanor Terrett, the U.S. Securities and Exchange Commission (SEC) is poised to reject applications for a spot Solana exchange-traded fund (ETF).
At least two prospective issuers have been informed of the denial. In addition, insiders suggest the SEC has little appetite for greenlighting new crypto ETFs during the current administration.
The development marks a broad interest spurt by asset managers looking to launch ETFs tied to the spot price of Solana (SOL), a cryptocurrency ranked fifth by market cap. Now Grayscale Investments is in the mix, filing Tuesday to convert the Solana Trust, which oversees over $134 million in assets, into a spot ETF ticker GSOL.
Grayscale is just the latest company, along with VanEck, 21Shares, Bitwise, and many others, to seek approval for their Solana-focused investment products.
That spike in applications shows fund managers trying to diversify into more crypto offerings as the spots on Bitcoin and Ethereum ETFs ramp up. However, this signals that the regulatory headwinds in the crypto ETF market have driven a strong move for diversification.
Solana Spot ETFs: Can They Overcome Regulatory Barriers?
XRP-focused ETFs are gathering major traction as the push for cryptocurrency exchange-traded funds (ETFs) continues. Bitwise, Canary Capital, and WisdomTree firms actively pursue regulatory approval for their offerings.
While these ETFs rely on the SEC’s evaluation of the underlying assets, especially Solana (SOL) and XRP, their fate depends on it. In August, the SEC rejected filings for two Solana spot ETFs from Cboe BZX because it Was concerned that Solana was classified as a security.
The take of SEC Chair Gary Gensler and his regulators has been notably strict about cryptocurrency assets. A rejection of spot Solana ETFs is unlikely to surprise issuers who have tread this path before on the Ethereum front.
In lawsuits against Binance and Coinbase, the SEC has already branded Solana (SOL), Cardano (ADA) and Polygon (MATIC) as securities. However, recent findings suggest that things may be changing.Â
The SEC let in a recent court filing on the Binance case, stating that it no longer wants a court ruling on whether Solana is considered a security. However, the future of crypto ETFs is still being determined as SEC decisions continue to hold sway.
