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In a significant development, the United States Securities and Exchange Commission (SEC) has rejected several 19b-4 applications. According to a source familiar with the matter, the Cboe BZX Exchange submitted an application on behalf of two potential issuers for a spot Solana Exchange-Traded Fund (ETF).
SEC Denial Comes Amid Security Classification Concerns
The SEC’s decision led to the immediate withdrawal of these applications from the Cboe website. Notably, the decision to deny the applications stems from its ongoing stance that Solana (SOL), the native cryptocurrency of the Solana blockchain, is classified as a security.
This classification places Solana under the regulatory purview of the SEC, which enforces strict guidelines for securities trading. For now, the rejection of these applications underscores the ongoing regulatory uncertainty surrounding the U.S. cryptocurrency market, with the SEC maintaining a firm grip on which digital assets can be incorporated into investment products like ETFs.
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However, the 19b-4 application could be refiled or amended in the future, with stronger language arguing that Solana is not a security.
Uncertainty on Solana ETF Approval
Recall that a few days ago, the 19b-4 forms submitted by VanEck and 21Shares for a Solanan ETF were reportedly removed from the Cboe website. However, the financial community debates whether the companies intentionally withdrew the 19b-4 filings or if there are other reasons for the delay in the approval process.
Recently, Matthew Sigel, an executive at VanEck, said that not only are there regulatory hurdles that they must overcome, but the product will go live depending on who wins the November Presidential election. He also affirmed that its firm’s S-1 form remains on the SEC’s filing system.
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Solana Set to Dominate the Industry
Franklin Templeton, a global investment firm released a report in May titled “Solana: Accelerated Adoption,” suggesting that Solana is poised to become the third major cryptocurrency asset after Bitcoin (BTC) and Ethereum (ETH).
Analysts highlight Solana’s dominance in capturing the surge of crypto activity, driven by major airdrops within the Solana ecosystem, such as Jito and Pyth, which created a “billion-dollar-plus wealth effect.” This effect drove SOL and other SOL ecosystem tokens higher, particularly meme coins. Meanwhile, Solana has witnessed a significant increase in total fees and decentralized exchange (DEX) volumes over the past year, indicating robust growth.
