SEC faces first deadline to decide on Grayscale’s Solana Trust ETF conversion proposal

Key Takeaways

The SEC is dealing with its first deadline to determine on Grayscale’s proposal to transform Solana Belief to an ETF.
A number of corporations, together with VanEck and Bitwise, await SEC selections on their Solana ETF proposals.

The US SEC faces its first deadline in the present day to decide on Grayscale’s software to transform its Solana Belief (GSOL) to an ETF. Proposed Solana ETFs from VanEck, 21Shares, Canary Capital, and Bitwise anticipate the regulator’s choice on Jan. 25.

NYSE Arca proposed itemizing shares of GSOL as a spot Solana ETP on December 4. The belief, which launched in April 2023, had 7,221,835 excellent shares as of January 21.

The deadline comes after Gary Gensler’s departure as SEC Chair. Underneath Gensler, the SEC’s Division of Enforcement initiated quite a few lawsuits in opposition to crypto corporations, together with ones focusing on Binance and Coinbase, the place the regulator categorized Solana and plenty of different digital property as securities.

In accordance with Bloomberg ETF analyst James Seyffart, the Enforcement Division’s stance makes it difficult for different SEC divisions to contemplate a commodities ETF for Solana.

“The timeline may prolong into 2026 because of the SEC’s precedent of taking,” Seyffart mentioned in a current interview with Blockworks Macro. “The SEC’s Division of Enforcement is looking Solana a safety, which prevents different SEC divisions from analyzing it for a commodities ETF wrapper.”

For Solana ETFs to be authorized, regulatory hurdles must be resolved. ETF analysts counsel that the appointment of crypto advocate Paul Atkins to chair the SEC may facilitate this transformation.

Nevertheless, Atkins’ affirmation course of is anticipated to take a number of months. The SEC at present operates with three commissioners, together with Mark Uyeda, who has been designated as Performing Chair following the current transition of management beneath President Trump, Hester Peirce, and Caroline Crenshaw.

In accordance with Sol Methods CEO Leah Wald, whereas a change in SEC management may probably shift the regulatory panorama—with some speculating that Paul Atkins (if confirmed) may positively affect future selections on Solana ETF filings—a right away greenlight is unlikely.

“I feel there’s fairly some time till a SOL ETF will get authorized,” she mentioned in an earlier assertion, including that it may take a 12 months or extra for regulators to know Solana’s distinctive attributes.

Final July, VanEck and 21Shares filed the 19b-4 kinds with the SEC for his or her respective Solana ETFs, beginning the regulatory assessment course of. Canary Capital and Bitwise joined the race later that 12 months.

In accordance with Matthew Sigel, Head of Digital Property Analysis at VanEck, Solana capabilities equally to different digital commodities like Bitcoin and Ethereum.

Solana and XRP are thought of the main candidates for the subsequent wave of spot crypto ETFs, however as a result of ongoing authorized challenges, ETF analysts counsel an ETF tied to Litecoin is “most probably” the primary to launch beneath the Trump administration.

The CFTC views Litecoin as a commodity in its case in opposition to KuCoin.