The SEC has rejected Cboe's 19b-4 filings for two proposed Solana ETFs, citing concerns over Solana's classification as a security, which has stalled the approval process.
Regulator Stymies Solana ETF Proposals
The U.S. Securities and Exchange Commission (SEC) has rejected the 19b-4 filings submitted by Cboe BZX for two proposed spot Solana Exchange-Traded Funds (ETFs). The filings were submitted by the crypto exchange on July 8 and, according to sources familiar with the matter, were subsequently withdrawn from the Cboe website.
The SEC's decision aligns with its ongoing concerns that Solana should be classified as a security, a stance the Commission has consistently asserted in various court cases. This regulatory position has hindered the advancement of Solana ETF proposals, reflecting the broader challenges faced by cryptocurrency-based financial products in the U.S. market.
Implications of 19b-4 Rejections
The 19b-4 filings are crucial documents that exchanges, such as Cboe, submit on behalf of ETF issuers to the SEC. Once these forms are posted in the Federal Register, they trigger the SEC’s formal review process, setting the stage for potential approval or denial within specific deadlines. However, with the SEC rejecting the 19b-4 filings in this instance, the Solana ETF proposals never advanced to this critical stage.
Senior ETF journalist Eric Balchunas highlighted that the Solana ETF filings failed to progress beyond the preliminary stages, noting that the SEC did not even acknowledge the filings.
Consequently, the exchanges withdrew the 19b-4 forms, though the S-1 registration statements from issuers remain active. The S-1 is another significant document in the ETF approval process but does not impose the same regulatory deadlines as the 19b-4.
Ongoing Challenges for Solana ETFs
The rejection of the 19b-4 filings marks a significant setback for potential issuers like 21Shares and VanEck, who are actively seeking to launch Solana ETFs. Despite this regulatory roadblock, their applications continue to be listed on the SEC’s EDGAR system.
VanEck's Head of Research, Matthew Sigel, has indicated that their application remains in play, suggesting that issuers might explore re-filing or amending their proposals to address the SEC’s concerns.
Head of communications at 21Shares, Audrey Belloff, said,
"We are unable to comment on the regulatory process at this time. We remain committed to expanding investor access to cryptocurrencies in the U.S. market and around the world.”
The SEC’s resistance to Solana ETFs underscores the regulatory challenges faced by cryptocurrency-based financial products in the U.S. market.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
