TLDR

  • VanEck’s plans for a Solana ETF are “still in play” despite the removal of Cboe Global Markets’ regulatory filing (19b-4) from its website.
  • The SEC had discussions with prospective Solana ETF issuers about concerns over Solana’s potential status as a security before the 19b-4 forms were removed.
  • The 19b-4 filings for Solana ETFs have not been filed to the Federal Register, which would have started the approval process clock.
  • VanEck argues that Solana is a commodity, similar to Bitcoin and Ethereum, rather than a security.
  • Some market watchers believe Solana ETFs are unlikely to be approved under the current administration.

The path to a Solana-based exchange-traded fund (ETF) has hit a snag, as recent developments reveal ongoing regulatory challenges and concerns from the U.S. Securities and Exchange Commission (SEC). Despite these setbacks, some issuers, including VanEck, maintain that their plans for a Solana ETF are still active.

The situation came to light when the Cboe Global Markets removed its regulatory filing (known as a 19b-4) proposing to list VanEck’s and 21Shares’ planned Solana ETFs from its website. This removal sparked speculation about the status of these proposed investment vehicles.

Matthew Sigel, VanEck’s head of digital assets research, addressed the situation on social media, stating, “Some have noticed that the 19b-4 for the VanEck Solana ETF has been removed from the CBOE website.” He clarified that while exchanges like Nasdaq and Cboe file rule changes (19b-4) to list new ETFs, issuers like VanEck are responsible for the prospectus (S-1). “Ours remains in play,” Sigel added.

However, sources familiar with the matter revealed that the SEC had discussions with prospective Solana ETF issuers about its concerns over Solana’s potential status as a security. These talks preceded the removal of the 19b-4 filings from Cboe’s website. Following these discussions, the SEC reportedly rejected the 19b-4 forms, leading to their removal and preventing their filing to the Federal Register, which would have initiated the formal approval process.

The distinction between securities and commodities is crucial in this context. VanEck argues that Solana should be classified as a commodity, similar to Bitcoin and Ethereum. This perspective aligns with evolving legal views suggesting that some crypto assets may function as securities in primary markets but behave more like commodities in secondary markets.

“VanEck believes SOL is a commodity, much like BTC and ETH. This belief is informed by evolving legal perspectives, where courts and regulators have begun to recognize that certain crypto assets may function as securities in primary markets but behave more like commodities in secondary markets,” Sigel explained.

The regulatory landscape for cryptocurrency ETFs has been evolving rapidly. Bitcoin and Ethereum ETFs have already launched, using an atypical “grantor trust” fund structure typically designed for funds that passively hold a single type of commodity. The success of Solana ETF proposals may hinge on whether they can conform to a similar structure.

However, market watchers are less optimistic about the near-term prospects for Solana ETFs. Nate Geraci, president of investment advisor The ETF Store, suggested that Solana ETFs won’t have a chance of securing approval under the current Biden Administration.

Bloomberg Intelligence’s ETF expert James Seyffart echoed this sentiment, stating that a Solana ETF “only has a shot to launch sometime in 2025 if we have a new admin in the White House and SEC. Even then not guaranteed.”

Despite these challenges, VanEck remains committed to advocating for its position. “We remain committed to advocating this position alongside our exchange partners to the appropriate regulators,” Sigel stated.

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