Solana ETF Talks and SEC Decisions

The U.S. Securities and Exchange Commission (SEC) recently engaged in discussions with potential issuers of a Solana ETF regarding concerns over Solana’s classification as a security. This occurred ahead of the Cboe BZX’s removal of related 19b-4 filings.

Following these discussions, the SEC decided to reject the 19b-4 forms, leading to their removal from the Cboe website and not filing them with the Federal Register. This filing is crucial as it initiates the ETF approval process and creates pressure on the SEC for timely decisions.

Over the weekend, it was noted that the 19b-4 filings, typically submitted by exchanges for issuers, were no longer visible online nor in the Federal Register. For an ETF to receive approval, both the 19b-4 forms and S-1 registration statements must be validated, though S-1 forms do not impose specific deadlines on the SEC.

Currently, 21Shares and VanEck are competing to offer a Solana ETF, and VanEck’s application remains active according to its Head of Research, Matthew Sigel.

The Case for a Solana ETF

The SEC’s contact with these companies did not come as a surprise, given their previously stated stance that Solana is a security. Issuers anticipate possible future amendments or new filings of the 19b-4 forms to strengthen arguments that Solana should not be classified as a security.

Audrey Belloff, head of communications at 21Shares, stated, “We are unable to comment on the regulatory process at this time. We remain committed to expanding investor access to cryptocurrencies in the U.S. market and around the world.”

Although Bitcoin and Ethereum ETFs have successfully cleared regulatory hurdles, many market analysts suggest that the SEC may be less willing to approve Solana ETFs in the current administration. Nate Geraci, president of The ETF Store, indicated on August 17 that Solana ETFs might struggle for approval under the Biden Administration. This sentiment is also supported by Bloomberg Intelligence’s ETF specialist, James Seyffart, who noted that approval could be unlikely until 2025, contingent upon a new administration.

Despite the SEC’s labeling of Solana as a security, VanEck has put forth the argument that Solana functions as a commodity akin to Bitcoin and Ether. The SEC has not provided a comment on these discussions, and neither VanEck nor the Cboe has responded to requests for comment.

This article has been updated to reflect information from a second source regarding the rejection of the 19b-4 forms, as well as a correction about 21Shares’ ETF filing still being accessible on EDGAR.