Fidelity's proposal for a Solana-based ETF is facing another delay due to the SEC's request for public input. This signifies ongoing regulatory hurdles for alternative crypto ETFs.
Overview of the ETF Situation
The application submitted through the Cboe BZX Exchange is currently undergoing formal review. The SEC is seeking additional public input before making a decision. This delay, while not unexpected, highlights the regulatory challenges facing altcoin-based ETFs.
New SEC Requirements for Crypto ETFs
The SEC's recent guidance on crypto ETFs requires asset managers to clearly articulate key risk factors and fund structures in plain language. This new approach is anticipated to streamline future applications, but it hasn't yet cleared the way for Solana-focused offerings.
Alternative Strategies in Response to Delays
As the approval queue remains uncertain, some firms, such as REX Financial and Osprey Funds, have launched a hybrid product—the REX-Osprey Sol + Staking ETF, which provides indirect exposure to the Solana ecosystem and its staking rewards, sidestepping current regulatory bottlenecks.
Financial firms continue to explore alternative avenues for participating in the cryptocurrency market while regulatory hurdles necessitate patience and adaptation to the new SEC requirements.
