Solana ETF Application Rejected by SEC, Read the Explanation!

Bittime - United States Securities and Exchange Commission (SEC) will reportedly reject the application for ETF Solana proposed by several asset management companies. Why does this happen? Check out the explanation in this article!

The SEC's decision to reject the Solana ETF comes after more than five ETF filings from major companies. They seek to give investors direct access to Solana (SOL) in hopes of expanding the reach of crypto in traditional markets.

SEC Rejects Solana ETF

According to a Fox News report cited by Eleanor Terrett, SEC have confirmed that they will not approve Solana's ETF application. At least, they will continue to resist during the current administration. 

“The existing consensus is that the SEC will not consider a new crypto ETF under the current administration,” Terrett said on December 6, 2024. 

This decision is a follow-up step after the SEC previously rejected similar applications for Bitcoin and Ethereum. Both also received similar rejection from the regulator.

Read also: 8 Best Crypto Projects Developed in the US, There are XLM, HBAR, and XRP

Some big companies like VanEck, 21Shares, And Bitwise has been applying for an ETF for Solana since last summer. They hope to provide a way for institutional and individual investors to invest in SUN without having to go through complicated processes, such as managing a crypto wallet. 

Even so, the SEC does not provide room for such applications in the near future.

Why Did the SEC Reject the Solana ETF?

Source: Bitcoin Sistemi

The main reason for this rejection lies in the lack of clear regulations regarding cryptocurrencies under the current administration. Gary Gensler, the current Chairman of the SEC, is known for his conservative stance towards crypto, which is often seen as less than friendly towards new digital asset-based products. 

Even, Paul Atkins, a crypto policy expert who was recently nominated to become SEC chairman replacing Gensler, is expected to bring changes to this policy once he is sworn in next January.

Industry experts believe that after the leadership change at the SEC, momentum for ETF Solana will increase. However, this still takes time. 

Because, ETF applications must go through a long series of procedures and assessments from the regulator. This includes compliance with stricter legal requirements and transparency.

Read also: Top 5 Trending Solana Memecoins: There's BARSIK and PNUT

Impact of ETF Rejection on Solana and Crypto Markets

The SEC's rejection of Solana's ETF application certainly disappointed many parties. Previously, the ETF application for Bitcoin And Ethereum has received the green light from the SEC. 

However, Solana (SUN), which has shown impressive performance in recent months, will apparently have to wait a little longer for similar approval.

For Solana, this is not the end of the journey. Although its ETF is rejected for now, the network Solana continues to evolve with various technical updates and strategic partnerships that can increase long-term adoption. 

In addition, there is the possibility of an ETF for Ethereum (ETH) and other crypto-based products, such as stablecoin, is still open, which could pave the way for Solana in the future.

Read also: Altseason Begins: Crypto Whales Start Trading XRP and Solana

Conclusion

SEC rejection of filing ETF Solana shows how strict regulations are applied to crypto-based products in the United States. However, this rejection is not the end of the journey for Solana. 

With the upcoming change in leadership at the SEC, hopes of getting approval for ETF Solana there still is. For investors, this may be a signal to be more careful in assessing the potential risks and rewards of Solana and other cryptocurrencies in the future.

FAQ About Solana

What is Solana (SOL)?

Solana is a blockchain platform known for its speed and efficiency. The SOL token is the native crypto asset and is used to pay its transaction fees. Since its launch in 2017, Solana has grown to become one of the largest crypto assets in the world.

Is Solana better than Ethereum?

Solana processes 3,000% more transactions than Ethereum, has 1,300% more daily active users, and its transaction fees are almost 5 million percent cheaper. This is a monumental difference that shows Solana's potential efficiency and scalability advantages.

Who is the creator of Solana?

Solana was launched in 2020 by Solana Labs, which was founded by Anatoly Yakovenko and Raj Gokal in 2018.

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Reference: 

Cryptopotato, Solana ETF Filings Face Obstacles as SEC Rejection Looms, accessed December 7, 2024.

Cointelegraph, SEC to reject bids for spot Solana ETFs — Report, accessed December 7, 2024.

Author: Y