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21/08/24
131
Solana ETF Approval Faces Stiff Regulatory Headwinds
The prospects for Solana exchange-traded funds (ETFs) receiving approval in the United States appear bleak under the current administration. Recent reports indicate that the U.S. Securities and Exchange Commission (SEC) has rejected a critical filing necessary for their approval. Observers speculate that the SEC acted preemptively, citing concerns regarding whether Solana should be classified as a security.
The situation worsened when the Cboe exchange removed the filings for two proposed Solana ETFs from its “Pending Rule Changes” page on August 16, effectively signaling a lack of optimism for their approval. Market analysts suggest that unless there is a significant shift in regulatory leadership, the chances of Solana ETFs gaining traction might remain near-zero for 2024 and potentially beyond. The ongoing political climate has fueled speculation about the possibility of future approvals, notably hinging on potential leadership changes.
In terms of market classification, some experts believe that approval for Solana ETFs would depend on Solana being recognized as a commodity rather than a security. The head of digital asset research at VanEck emphasizes that evolving interpretations of cryptocurrency regulation could support the view of Solana as a commodity. The recognition of certain crypto assets as behaving like commodities in secondary markets reinforces this perspective.
A notable legal precedent from 2018 involving “My Big Coin Pay” may further influence the discussion surrounding Solana’s status. In that case, the judge ruled that My Big Coin was indeed a virtual currency akin to Bitcoin, allowing the Commodity Futures Trading Commission (CFTC) to classify it as a commodity, regardless of the absence of futures contracts associated with it. The ruling could lend support to efforts to reclassify Solana.
Despite the challenges ahead, VanEck remains optimistic, noting that their S-1 filing is still active even with recent regulatory setbacks. The firm emphasizes that while exchanges handle the rule changes, issuers are responsible for the prospectus filings, which continue to progress.
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