The U.S. Securities and Exchange Commission (SEC) has expressed significant compliance concerns regarding proposed exchange-traded funds (ETFs) based on Ethereum (ETH) and Solana (SOL), according to a recent report by Decrypt.
The SEC’s reservations could pose major hurdles for asset managers seeking to launch these crypto-based investment products.
SEC Flags Compliance Concerns Over Proposed Ethereum and Solana ETFs
► https://t.co/NPaoR9ooXe https://t.co/NPaoR9ooXe— Decrypt (@DecryptMedia) June 2, 2025
Interest in cryptocurrency ETFs has surged following the SEC’s approval of spot Bitcoin ETFs in early 2024, resulting in billions of dollars in inflows and increasing mainstream acceptance of digital assets. Asset managers have since filed proposals for similar products based on Ethereum and Solana, two of the largest cryptocurrencies by market capitalization.
The SEC has compliance concerns regarding proposed Ethereum and Solana ETFs due to market manipulation risks in their less-regulated spot markets, challenges in ensuring secure digital asset custody, and questions about the adequacy of transparency and surveillance mechanisms to prevent illicit activities.
The SEC’s stance has created uncertainty for asset managers, including major firms like BlackRock and Fidelity, who are eager to expand their crypto ETF offerings. While some industry participants remain optimistic that the SEC will eventually approve Ethereum ETFs, the path forward for Solana-based products appears even more uncertain due to its smaller market size and higher perceived risks.
The SEC has not set a timeline for its decision on Ethereum or Solana ETFs. Industry observers expect ongoing dialogue between regulators and asset managers as the crypto market continues to evolve.
Notably, Pakistan is establishing the Pakistan Digital Assets Authority (PDAA) to regulate its digital asset and blockchain industries, marking a notable shift from its previous anti-crypto stance. The PDAA will be responsible for licensing, ensuring compliance, and fostering innovation in the digital asset space, encompassing cryptocurrency exchanges and DeFi protocols. In addition to regulatory functions, the authority intends to tokenize national assets and investigate using excess electricity for Bitcoin mining, with the goals of attracting foreign investment and positioning Pakistan as a Web3 centre.
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