SEC faces first deadline to resolve on Grayscale's Solana Belief ETF conversion proposal

Key Takeaways

The SEC is going through its first deadline to resolve 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 at this time 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 determination 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. Beneath Gensler, the SEC’s Division of Enforcement initiated quite a few lawsuits towards crypto corporations, together with ones focusing on Binance and Coinbase, the place the regulator categorised Solana and a lot of different digital belongings as securities.

Based on 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 might prolong into 2026 as a result of SEC’s precedent of taking,” Seyffart mentioned in a current interview with Blockworks Macro. “The SEC’s Division of Enforcement is asking Solana a safety, which prevents different SEC divisions from analyzing it for a commodities ETF wrapper.”

For Solana ETFs to be authorized, regulatory hurdles have to be resolved. ETF analysts recommend that the appointment of crypto advocate Paul Atkins to chair the SEC might facilitate this modification.

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

Based on Sol Methods CEO Leah Wald, whereas a change in SEC management might probably shift the regulatory panorama—with some speculating that Paul Atkins (if confirmed) might 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 might take a 12 months or extra for regulators to grasp 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.

Based on Matthew Sigel, Head of Digital Belongings Analysis at VanEck, Solana features equally to different digital commodities like Bitcoin and Ethereum.

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

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