The U.S. Securities and Exchange Commission (SEC) rejected the 19b-4 applications from Cboe BZX for two potential Solana ETFs, citing Solana's classification as a security. This move follows long-standing discussions between the SEC and issuers.
Reasons for Rejection
The SEC rejected the applications based on its stance that Solana is a security, which it has previously asserted in court filings. The 19b-4 applications, filed by exchanges on behalf of issuers, typically start the SEC approval process if placed in the Federal Register. However, due to the rejection, these forms were never published and the process did not commence.
Discussions and Reactions
The rejection followed discussions between the SEC and issuers regarding Solana's status. In these discussions, the SEC reiterated its previously stated concerns. Currently, companies like 21Shares and VanEck are responding differently: 21Shares has paused its plans, while VanEck's S-1 form remains in the EDGAR system. VanEck's Head of Research Matthew Sigel stated that their process continues.
Future Prospects
Despite the rejections, there is the possibility of resubmissions or amendments with stronger arguments that Solana is not a security. "We are unable to comment on the regulatory process at this time. We remain committed to expanding investor access to cryptocurrencies in the U.S. market and around the world," said Audrey Belloff, Head of Communications at 21Shares.
The rejection of Solana ETF applications highlights ongoing differences in the classification of cryptocurrencies between the SEC and issuers. Future actions will continue to be closely monitored by the market.
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