SEC Raises Concerns Over Solana ETFs, Halts Approval Process

• The SEC discussed its concern over Solana’s potential status as a security with ETF issuers.
• Based on discussions, the Cboe removed the related 19b-4 forms, necessary for filing, from its website.
• Although the SEC backs Solana as a security, VanEck argues that the cryptocurrency is just a commodity.

The U.S. Securities and Exchange Commission (SEC) has reportedly been in talks with several Solana exchange-traded fund (ETF) issuers about its growing concern over the crypto’s status as a security. After discussions with the issuers, the SEC and the Chicago Board Options Exchange(Cboe) agreed not to file the related 19b-4 forms with the Federal Register, thereby delaying the approval process. 

Based on recent developments, the 19b-4 forms, filed by the crypto exchanges on behalf of the issuers, are no longer visible on the Cboe website or with the Federal Register. The ETF issuers require these forms and the S-1 registration statement for approval. Notably, the SEC’s filing system still shows the ETF issuer Vaneck’s S-1 registration for Solana’s ETF.

Many issuers are not surprised by the SEC’s statement keeping Solana as a security. Solana (SOL), one of the cheapest and fastest blockchains in the crypto world, has garnered attention due to its regulatory risks. In many case filings, the SEC has claimed Solana as its security. However, the issuers await new amendments to the 19b-4 forms. 

Even though the SEC backs Solana as a security, VanEck believes that cryptocurrency is just a commodity and performs similar functions to Bitcoin (BTC) and Ethereum (ETH). To assert his point, VanEck filed for an ETF with SOL. 

In June, VanEck submitted a filing with Solana that sparked a significant rally for the cryptocurrency, boosting its growth by 11%, its highest increase since late May. Vaneck aimed to launch a Solana Trust ETF with the SEC; however, the filing did not possess any ticker symbol or associated fee details. The filing highlighted the inclusion of Solana in new ETFs to boost its position in the financial markets in the future.