SEC Reportedly Rejects Solana ETF Applications, Stalling Crypto’s ETF Expansion

The U.S. Securities and Exchange Commission (SEC) has reportedly blocked Solana ETF applications, marking a significant setback for crypto investors. With Solana’s spot exchange-traded fund plans now stalled, this decision underscores the SEC’s ongoing resistance to new cryptocurrency ETFs.

SEC’s Stance on Crypto ETFs Remains Cautious

According to Fox Business’ Eleanor Terett, the SEC informed at least two of five applicants that their Solana ETF filings would not be approved. This decision is part of the SEC’s broader opposition to cryptocurrency ETFs, with many speculating that no new crypto ETFs will be approved until there’s a leadership change at the agency.

The Solana ETF proposals, which aimed to introduce direct exposure to the digital asset, had been gaining traction among investors and market analysts. The launch of a Solana spot ETF was seen as a pivotal moment for the broader adoption of crypto assets, following the approval of Bitcoin (BTC) and Ethereum (ETH) futures-based ETFs.

However, the SEC’s decision to block these filings underlined the agency’s cautious approach to digital assets. It also highlighted its continued scrutiny of how these products align with existing financial market regulations.

Solana ETF Industry Reactions: Optimism Amid Setbacks

The supposed rejection of the Solana ETF has sparked mixed reactions across the industry. Some remain hopeful for future approval following a potential change in political leadership, while others, including ETFStore President Nate Geraci, suggest the SEC’s stance may not be entirely prohibitive.

“Interestingly, the SEC recently acknowledged Bitwise’s filing for a crypto index ETF, which includes a 4% weighting to Solana,” Geraci noted in a tweet, suggesting that some indirect exosure to Solana could still make its way into the broader ETF market.

Meanwhile, critics like Fragmetric CEO SolZacque framed the SEC’s actions as delay tactics, commenting, “Everything SEC is against will be approved after Trump’s inauguration… emotional trolling lol.” This reflects broader frustrations within the crypto sector, where many view regulatory hurdles as a barrier to progress.

Guido Lange, an industry observer and the founder of Block-Builders[.]de and b11s[.]io speculated on the broader ramifications, suggesting that this rejection could impact other crypto-related ETF applications, including for XRP. “It seems like Gary [Gensler] is pretty bitter on his way out. The issuers will likely have to reapply under the new SEC leadership,” Lange remarked.

Solana ETF: The Long Road?

Anticipation for a SOL ETF has been building since May, fueled by discussions on platforms like CNBC. Bloomberg Intelligence analyst James Seyffart had previously made a multi-year timeline forecast for SOL ETF approval, contingent on a CFTC-regulated futures market and market-structuring bills such as FIT21.

Seyffart predicted in May that demand for a SOL ETF would rank high, trailing only Bitcoin (BTC) and Ethereum (ETH). Yet, he flagged the SEC’s designation of Solana as a security—emphasized in lawsuits against leading exchanges—as a potential roadblock.

With the SEC’s recent rejection of Solana ETF filings, the outlook for a Solana ETF in the short term appears dim, at least under the current administration. The rejections are consistent with the SEC’s broader reluctance to approve new crypto ETFs, with market participants now looking to potential future leadership changes to clear the regulatory hurdles.

Yona has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is an official media and publication of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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