SEC to Reject Two Spot Solana ETF Filings: What’s the Reason?

SEC's Rejection of Solana ETFs Reflects Ongoing Regulatory Challenges

In a significant development, the U.S. Securities and Exchange Commission (SEC) has notified at least two applicants that their 19b4 filings for Spot Solana ETFs will be rejected. This decision, reported by FOX Business' Eleanor Terrett, suggests a challenging landscape for cryptocurrency ETFs under the current administration. 

The SEC took this decision due to changes in the team members and the possibility that the SEC may not approve any new cryptocurrency ETF applications during the current administration. Wu Blockchain took to X to share the latest update on Solana Spot ETF. 

Source: X

SEC's Stance on Solana ETFs

The SEC's decision to reject the Spot Solana ETF filings is based on concerns about market manipulation and investor protection. This stance aligns with the SEC's cautious approach toward cryptocurrency ETFs, reflecting broader regulatory uncertainties. Despite numerous filings from various asset managers, including Grayscale, 21Shares, Canary Capital, VanEck, and Bitwise, the SEC remains hesitant to approve new crypto ETFs. The SEC took this decision due to changes in the members and the possibility that the SEC may not approve any new cryptocurrency ETF applications during the current administration.

Potential Rejections and Market Impact

Grayscale and Bitwise, who recently submitted their 19b4 forms for a Solana ETF, are among the potential candidates that may face rejections. Grayscale filed for a Solana Spot ETF in early December 2024, while Bitwise submitted its application at the end of November. Although the SEC has not confirmed these rejections, the consensus is that the agency will not entertain any new crypto ETFs under the current administration.

Despite these announcements, the Solana price has remained stable. At press time, SOL was trading at $242.39, reflecting a 3% intraday surge with a market cap of $115.19 billion and a 24-hour trading volume of $9.20 billion. This indicates that the market has already priced in the regulatory risks associated with Solana ETFs.

Changes Ahead with New SEC Chairman

In a move that could significantly impact the crypto industry, President-elect Donald Trump has nominated Paul Atkins as the next SEC chairman. Atkins, known for his advocacy for digital assets and a free-market approach, could bring substantial changes to the regulatory environment. This appointment raises questions about future SEC policies and the potential for a more favorable stance towards crypto ETFs.

Conclusion 

The SEC's rejection of two SOL Spot ETF filings underscores the regulatory challenges facing cryptocurrency ETFs. While this decision has not significantly impacted Solana's price, the future regulatory landscape may shift with new leadership at the SEC. Asset managers and investors alike will be closely monitoring developments for any changes in the SEC's news on Solana ETF approval policies.