The Securities and Exchange Commission (SEC) has reportedly raised questions about whether Solana (SOL) should be classified as a security, potentially putting a halt to filings related to its exchange-traded funds (ETFs).
According to The Block, the SEC engaged in discussions with ETF applicants and expressed concerns regarding Solana’s status as a security. Following these discussions, the SEC and exchange operator Cboe Global Markets Inc. (CBOE) decided to refrain from submitting the 19b-4 forms to the Federal Register, which would have initiated the approval process for Solana ETFs. This action effectively prevents the SEC from facing pressure to make decisions about the proposed Solana ETFs.
The SEC has not yet responded to Benzinga’s request for comment on the matter.
Over the weekend, it was observed that the 19b-4 filings, typically submitted by exchanges on behalf of issuers, are no longer visible on the Cboe website. The filing of the 19b-4 document was the second step in getting ETFs greenlighted, following the submission of S-1 documents by VanEck and 21Shares in late June.
Amidst the speculation, Matthew Sigel, the Head of Digital Assets Research at VanEck, voiced support for SOL, asserting that the asset manager considers SOL a commodity, similar to Bitcoin (BTC) and Ethereum (ETH). VanEck’s belief is rooted in evolving legal perspectives, where courts and regulators have started to acknowledge that certain crypto assets might function as securities in primary markets but behave more like commodities in secondary markets.
Earlier this month, Brazil approved its first-ever Solana ETFs, paving the way for mainstream investors to gain exposure to the price movements of the world’s fifth-largest cryptocurrency.
At the time of writing, SOL’s price was unaffected, rising 2.72% in the last 24 hours, according to data from Benzinga Pro.
The SEC’s concerns over Solana’s security status highlight the ongoing challenges in regulating the cryptocurrency space. While the SEC remains silent on its specific concerns, the decision to halt ETF filings raises questions about the future of Solana-based ETFs and the broader regulatory landscape for crypto assets. It remains to be seen how the SEC will ultimately classify Solana and what implications this will have for the future of the cryptocurrency.
