Today’s decision will have a very huge impact on the crypto ETF space.
Today is the first deadline for the US Securities and Exchange Commission (SEC) to give its position on Grayscale’s request to convert its Solana Trust (GSOL) into a spot Solana Exchange-Traded Fund (ETF).
On December 4, the NYSE Arca proposed to list GSOL shares as a spot Solana ETF. Launched in April 2023, the trust had over 7.2 million outstanding shares, as of January 21.
Meanwhile, as the ruling nears, it is important to know that whatever the SEC decides today could potentially set the stage for similar Solana ETF proposals from VanEck, 21Shares, Canary Capital, and Bitwise.
Although these other investment firms do not expect a verdict from the regulator until January 25, they are most likely going to face the same outcome as Grayscale later today.
Solana ETF Faces Big Uncertainty
There is no doubt that today’s decision will have a very huge impact on the crypto ETF space. More so, since it’s coming after the former Chair Gary Gensler’s exit from the commission.
Gensler’s administration was marked with very strict actions against crypto firms, which were sometimes perceived to be extremely hostile. Under Gensler, the SEC, through its Enforcement Division, raised various lawsuits, including against high-profile crypto companies like Binance and Coinbase.
Also, his team labeled Solana and several other cryptocurrencies as securities, a move that already complicates any attempt to approve a Solana ETF.
In view of this and the SEC’s history of slow decision-making, Bloomberg ETF analyst James Seyffart does not see a Solana ETF being approved earlier than next year. In a recent interview, Seyffart said:
“The SEC’s Division of Enforcement is calling Solana a security, which prevents other SEC divisions from analyzing it for a commodities ETF wrapper.”
Positive Changes on the Horizon?
According to Seyffart, for Solana ETFs to be approved, the current regulatory situation must be resolved. However, one of the first steps in that direction would be to appoint a new Chair for the regulatory body.
Paul Atkins comes to mind as the right candidate to take over the affairs of the US SEC, having been tipped likewise. Moreover, he is a popular crypto advocate, one whose appointment would likely facilitate the change being clamored for.
Notably, though, Atkins’ confirmation process is expected to take many months. Therefore, the SEC will continue operating with just three commissioners. Those are Mark Uyeda, who is currently the Acting Chair, Hester Peirce, and Caroline Crenshaw.
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