- SEC confirms rejection of all spot Solana ETF applications under current rules.
- SEC’s stance on Solana ETFs highlights challenges for altcoin products.
- SEC prioritizes futures-based ETFs, rejecting Solana spot ETF proposals.
Hopes for a Solana ETF were dashed after the U.S. Securities and Exchange Commission (SEC) announced plans to reject several spot applications. FOX reporter Eleanor Terrett confirmed the news, stating that the regulator will not approve any new crypto ETFs under the current administration.
Sources say the securities regulator informed at least two of the five issuers seeking approval for SOL-based ETFs about the impending rejection. This move highlights the SEC’s reluctance to consider new crypto ETF proposals, potentially hindering innovation and market growth in the sector.
Following the revelation, community reactions were mixed. Some expressed cautious optimism, hoping that at least one of the five filings might still be approved. However, Terrett dismissed this possibility, citing the launch of Bitcoin ETFs. She emphasized that the SEC typically approves multiple ETFs simultaneously, rather than approving a few while rejecting others.
SEC’s Rejection of Solana ETFs: Challenges for Altcoins
Terrett suggests that the rejection of some filings signals a broader disapproval of spot Solana ETFs. The rejections reflect the SEC’s apprehension about altcoin ETFs, citing the potential for abuse in markets without established futures mechanisms. Another major hurdle is Solana’s classification as a security under certain conditions.
Read also: Solana Liquid Staking Tokens Hit $8 Billion in Market Value–2024
Unlike commodities such as Bitcoin or Ethereum, securities must adhere to stricter disclosure and reporting standards. This classification complicates the approval process, as ETFs linked to securities must meet heightened regulatory requirements.
Spot vs. Futures-Based ETFs
Crypto advocates argue that rejecting Solana ETF filings represents a missed opportunity to connect traditional finance and decentralized technology. Spot ETFs, designed to track the actual price of Solana, could provide transparency and broaden market accessibility. However, the SEC’s decision reflects its preference for futures-based products while maintaining strict scrutiny on spot crypto ETFs.
Also, the SEC’s not ready to approve any new crypto ETFs could discourage issuers and dampen hopes for any sort of blockchain-based financial instruments.
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