The SEC withdrew its court request to classify Solana and several others as securities. However, it doesn't mean much.
The agency still considers many of them, including Solana, to be securities.
The SEC's decision may be a strategic move rather than a change in stance.
The launch of Solana ETFs may be delayed due to regulatory concerns.
There is still a lot of confusion and speculation about the SEC's stance on these cryptocurrencies.
This week, the SEC withdrew its request for a court ruling to classify cryptocurrencies like Solana, Polygon and Cardano, among others, as securities.
The crypto community was quick to rejoice over the SEC's latest move because if the agency no longer actively pursued these cryptocurrencies as securities, they must be off the hook.
But are they?
Recall that as recently as June 2023, the SEC claimed that about 68 cryptocurrencies, including TON, XRP, BNB, MANA and others, were securities, in a move that is set to affect more than $100 billion worth of cryptocurrencies across the market.
Here's why all these cryptocurrencies, including Solana, might still need to be free from the SEC and why ETFs might take longer to arrive.
The SEC's 30 July withdrawal of its complaint in the Binance lawsuit has led to some wild speculation across the market.
However, Jake Chervinsky, the Chief Legal Officer at Variant Fund, weighed in through a tweet and made some interesting observations.
"There is no reason to think the SEC has decided SOL is a non-security," he began. "[This is] a litigation tactic, not a change in policy. Note that the SEC still calls these tokens securities in the other exchange cases."
He pointed out, for example, the ongoing case against Coinbase and the fact that most other cryptocurrencies, including Solana, are still being actively referred to as securities.
Other legal experts in the crypto sphere seem to agree with Chervinsky, with Justin Slaughter, the policy director at Paradigm, being a prime example.
Analysts like Marty Party initially sparked speculation that, according to the SEC, $ADA, $SOL, $MATIC, $Sand, $Fil, and $Mana are no longer securities.
However, according to Slaughter, the community might be "misinterpreting or overreading this filing."
Jennings explained further, suggesting that the SEC’s decision to drop the lawsuit might have a different reason altogether.
He explained that Judge Amy Berman Jackson's most recent ruling in the Binance case makes it very hard for the SEC to continue classifying these cryptocurrencies as securities "in that particular case."
Instead, Judge Katherine Polk Failla seems more sympathetic to the SEC in the Coinbase lawsuit, making it more strategic to drop the case with Binance and forge ahead with Coinbase.
In essence, it isn’t the cryptocurrencies themselves—it’s the SEC, playing a “win some, lose some” game.
Several crypto industry asset managers, including VanEck, 21 Shares, and Franklin Templeton, have expressed open interest in launching a Solana ETF. However, the tide appears to be shifting against this move.
A week after Robert Mitchnick, BlackRock’s head of digital assets, told the crowd at the Bitcoin2024 conference that there was "very little interest" in a Solana ETF, Samara Cohen, the company's CIO of ETF and index investments, mentioned something similar.
In an interview with Bloomberg Crypto, Cohen mentioned that Blackrock has "looked at what meets the bar in terms of regulation and interest," and the bottom line is that "Solana doesn't."
In another interview with Anthony Pompliano, Hany Rashwan, the CEO of 21Shares, said that more crypto education is needed within the crypto space.
However, ETFs for Cardano and Solana still need to be revised.
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