The likelihood of a Solana exchange-traded fund (ETF) being approved has hit a major obstacle, with reports suggesting that the U.S. Securities and Exchange Commission (SEC) may not advance the applications under current leadership.
According to Eleanor Terrett, a journalist with FOX Business, the SEC has reportedly informed at least two of the five Solana ETF applicants that their proposals will not advance, with preliminary rejection decisions expected by January 2025.
Terrett, citing an undisclosed source, revealed that the SEC is unlikely to approve any new crypto ETFs under the current administration. This stance marks a setback for the broader crypto industry, especially after the securities regulator’s approval of landmark ETFs earlier this year, including the Bitcoin spot ETF in January and the Ethereum spot ETF in July.
The move comes amid growing anticipation around Grayscale’s Digital Large Cap Fund (GDLC) application. The SEC recently acknowledged Grayscale’s request to convert GDLC into an ETF. The fund, which has $524 million in assets under management (AUM), includes diversified crypto assets such as Bitcoin, Ethereum, Solana, XRP, and Avalanche. Despite this progress, the SEC appears reluctant to expand the crypto ETF landscape further under current leadership.
The situation casts doubt on the broader crypto ETF market, potentially impacting other pending products with deadlines under the current leadership.
The decision could leave the Solana ETF applications and other pending proposals in limbo until the next administration takes over. The regulator’s hesitancy raises concerns about the broader crypto ETF market, particularly for products with deadlines approaching before January 2025.
SEC Chair Gary Gensler’s cautious approach to crypto regulation has drawn criticism from industry participants. Speculation about Gensler’s future intensified after his remarks at the Annual Institute on Securities Regulation on November 14, 2024, where he hinted at potential changes in leadership but stopped short of confirming his resignation.
Gensler has faced mounting pressure following President-elect Donald Trump’s campaign promise to overhaul the SEC’s leadership, specifically naming Gensler as a target for removal upon his inauguration in January 2025.
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