The excitement surrounding a potential Solana exchange-traded fund (ETF) has taken a major hit. The U.S. Securities and Exchange Commission (SEC) is raising new developments. The agency revealed that the approval process for this highly anticipated product may only move forward for a while.
This setback follows a flurry of optimism sparked by Grayscale’s involvement in the Solana ETF proceedings. However, it seems the hopes of the Solana community may be dashed, at least for now.
SEC Puts Brakes on Solana ETF Approval
According to FOX Business journalist Eleanor Terrett, speculation has emerged that the SEC has delivered a grim update to the Solana ETF applicants. Citing an undisclosed source, Terrett reported that the SEC notified at least two applicants their Solana ETF proposals would not advance.
This decision indicates that the SEC will not move forward with the Solana ETF under the current administration. Also, this development suggests that the SEC’s preliminary decision, expected in January 2025, will likely be unfavorable.
The update came after weeks of mounting optimism, fueled by Grayscale’s involvement in the ETF push. This news has left the Solana community shocked. The setback leaves applicants uncertain as they await potential approval in the future under different regulatory conditions.
SEC Maintains Tough Stance Against ETF Approval
The root of this setback lies in a shift in the SEC’s internal consensus. Under the leadership of Chairman Gary Gensler, the SEC has signaled that it will not approve any new crypto ETFs during this administration.
Despite approving the first-ever crypto spot ETFs, Bitcoin in January and Ethereum in July, the SEC seems hesitant to approve more. The agency appears cautious about expanding its approval of crypto-related products.
This new consensus within the SEC suggests that applications for Solana, XRP, and other cryptocurrency-based ETFs will face significant hurdles.
What Does This Mean for Solana’s ETF and Other Cryptocurrencies?
The impact of this new SEC direction is significant for the broader crypto market. Solana, which has long been seen as a promising candidate for its own ETF, will have to wait for a more favorable regulatory environment.
However, the Solana ETF is not alone in this predicament. Other cryptocurrencies with ETF applications, including XRP, will face similar delays. However, the precise timing of the next SEC decision remains uncertain. Some market analysts are cautiously optimistic that once the new administration takes office, there will be a more crypto-friendly regulatory stance.
If this occurs, the timeline for the launch of Solana and other crypto ETFs could be pushed back to late 2025. The incoming administration’s potential support for digital assets and more comprehensive regulations may be the key to turning the tide for these highly anticipated products.
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