Media: SEC under current leadership rejected applications to launch SOL ETFs

What’s new? The US Securities and Exchange Commission (SEC) has no intention of approving new spot exchange-traded crypto funds (ETFs) under the current administration, FOX reporter Eleanor Terrett reported. Commission officials have notified at least two of the five potential issuers that their Form 19b-4 filings to launch ETFs based on the native token of the Solana (SOL) blockchain will be rejected, she said.

Source: X.com

What else is known? In January of this year, the SEC approved spot bitcoin ETFs, and in July, Ethereum-based ETFs were allowed into the market, though issuers were prohibited from blocking ETH in staking, eliminating the possibility of rewards for network participation.

With these launches, traders expected similar investment products based on major altcoins, particularly SOL and XRP, to appear soon.

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Back in the summer, several investment firms, including VanEck and 21Shares, filed applications to launch spot SOL ETFs, both of which already issue spot BTC ETFs and ETH ETFs. However, in late August, the SEC said that SOL may fall under the definition of a security — which prevents the launch of commodity funds based on it — and rejected all applications.

Issuers began resubmitting applications in the fall, including Canary Capital, VanEck, and 21Shares, as well as Bitwise and Grayscale, which also have their own spot BTC ETFs and ETH ETFs. Grayscale, unlike the others, will not be creating a new product: it intends to convert its existing trust into a spot ETF, a similar move it did when launching its BTC and ETH funds.

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Issuers need to get SEC approval for two applications to launch crypto funds. The S-1 application involves the registration of new securities (exchange-traded fund shares) and is filed by the investment company itself, while the 19b-4 application is filed by the stock exchange that intends to list the fund.

The SEC is currently headed by Gary Gensler, who is pursuing an aggressive policy toward digital assets. Under him, the agency has refused to develop separate rules for the new industry and has begun to regulate it by filing lawsuits against individual firms, relying on laws dating back to the turn of the last century. For this, the agency has been repeatedly criticized by both developers and congressmen.

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On November 5, Donald Trump won the US presidential election, who made many statements during his campaign about the need to support the crypto industry and promised to fire Gensler. His victory triggered a sharp rally in the crypto market, which saw bitcoin rise above $103 600 for the first time.

Gensler himself had already announced his resignation after Trump’s inauguration on January 20, with the new president proposing “crypto lawyer” Paul Atkins to replace him. With a new presidential administration and a new SEC chairman, the chances of crypto funds being approved are increasing.

A crypto regulatory bill known as FIT21, which would put much of the power to oversee the crypto market in the hands of another market regulator, the Commodity Futures Trading Commission (CFTC), which is less aggressive toward digital assets, could also gain traction.

Despite the current SEC leadership’s skepticism of digital assets, in late November, the commission accepted Bitwise’s application to launch an index fund where Solana has a 4,3% stake.

Source: X.com

SOL slipped from fourth to fifth in the overall cryptocurrency market capitalization ranking late last week, at $114,1 billion at the time of writing. The asset is trading at $234,94, having added 1,6% overnight and 0,7% over the week. For the month the growth amounted to 44%, and since the beginning of the year, the asset has risen in price by 136%.