Alex Thorn, director of research at Galaxy Digital, has prepared an analysis of the SEC filing for a spot SOL ETF by investment firm VanEck. He believes the chances of the funds being created are slim. So are SOL ETFs still a mirage?
SOL ETFs will not be created?
Let’s start with the fact that VanEck has only prepared the S-1 document so far. No 19b-4 form has been completed. That’s strange. Why? “S-1” is the actual gateway for ETFs to the stock exchanges. Except that 19b-4 is an application-approval of funds. First, the SEC must check whether a given fund would be compliant with US law. In addition, this document starts the “clock” – starts the procedure and obliges officials to respond to the applicant within a specific deadline.
As Thorn points out, the problem may be deeper. The SEC currently views salt as an unregistered security. This results from documents regarding the case of the Coinbase cryptocurrency exchange.
This classification complicates the approval process for a salt-based ETF. Given that the Securities and Exchange Commission currently maintains in its case against Coinbase that solana is an unregistered security, in the absence of a significant change in position by the SEC, it is likely that this application (regarding the ETF) will be denied
– Thorn stated.
By approving the SOL ETF, the SEC will contradict itself.
Everything can still change
So won’t the SOL ETF be created? Not necessarily. Note that similar concerns have been raised in the context of ether. Ultimately, however, ETH-based funds were approved by the SEC and are expected to be listed on stock exchanges soon.
Additionally, the recently passed FIT21 bill in the House of Representatives sets the regulatory boundaries between the SEC and the Commodity Futures Trading Commission (CFTC). These rules clarify which digital assets should be treated as goods and which should be treated as securities. Such legislative clarity could pave the way for future approvals of cryptocurrency ETFs.
This type of transparency can also significantly impact or increase the chances of an ETF being approved for underlying digital currencies other than Bitcoin and Ethereum.
Thorn remarked.
It is therefore possible that SOL ETFs will be created. On the other hand, it is worrying that BlackRock did not file an application for such a fund. The giant is considered a very influential company. Some believe that it was the fact that Larry Fink’s company wanted to have its BTC and ETH ETFs that made the SEC bend and say “yes”.
