Expectations of Solana ETF approvals in the U.S. have hit yet another roadblock.
Outgoing SEC Chair Gary Gensler has reportedly sent rejection notices to at least two of five issuers.
According to FOX Business reporter Elenor Terrett, there is no hope of approval under the current administration.
This puts the timeline for a Solana ETF around August 2025.
Speculators and industry experts are calling these moves "Gensler's parting gifts" to the Crypto industry.
Speculation about spot Solana ETFs has been hot throughout 2024, especially since the approval of Bitcoin spot ETFs in January and spot Ethereum ETFs in July.
However, recent reports have shown that spot Solana ETFs might have a rough path to approval.
The U.S. Securities and Exchange Commission is reportedly preparing to reject applications for these ETFs, in another setback for crypto-related ETPs. According to Fox News reporter Eleanor Terrett, at least two of the five prospective issuers have already been informed of the rejection.
Here are all the latest updates about the spot Solana ETF market.
Aside from Bitcoin and Ethereum, the SEC's reluctance to entertain new ETFs is no new issue.
This reflects a broader trend under outgoing Chair Gary Gensler's leadership in the last four years.
"The consensus here, I'm told, is that the SEC won't entertain any new Crypto ETFs under the current administration,” Terrett stated in a 6 December post on X.
Recall that notable firms like VanEck, 21Shares, Canary Capital, Bitwise, and Grayscale have all filed applications for Solana ETFs since June.
Despite all these efforts to bring these financial products to light, the SEC seems consistent in its cautious approach.
Note that Terrett mentioned that the SEC will not entertain any new ETFs under the “CURRENT” administration.
This, of course, means that the latest setback doesn't necessarily spell an end.
The expected change of leadership at the SEC, under Trump, who nominated Paul Atkins as its new chair, might offer some recourse.
The transition of Atkins (a known crypto policy advocate) to the new SEC chair is expected to create a more favorable environment for the crypto ETF market.
In a recent post, Bloomberg ETF analyst James Seyffart reinforced Terett's speculation that the Solana ETF applications will remain "dead in the water..."
Applications are "dead in the water."
At least until the new administration resolves its ongoing confusion about whether Solana is a security or a commodity like Bitcoin and Ethereum.
This problem, naturally, has shifted the expected timeline for approval to August 2025 at the least.
All without counting the possible legal delays that might arise depending on the regulatory landscape.
According to Eric Balchunas, another Bloomberg ETF analyst, the ongoing updates with the Solana ETFs are Gensler's "parting gift" to the Crypto industry.
Recall that the former SEC Chair Gary Gensler recently announced that he would be stepping down from his position on 20 January 2025.
Gensler’s administration, marked by a stringent regulatory stance on Crypto, saw the classification of certain cryptocurrencies, like SOL, as securities across several lawsuits.
Moreover, this week, in addition to rejecting the spot Solana ETF applications, the Gensler administration dropped another "parting gift."
The agency reportedly filed another 81-page brief opposing the dismissal of the Binance lawsuit, which accused the exchange of offering tokens as unregistered securities.
This move was harshly criticized by Ripple’s Chief Legal Officer, Stuart Alderoty, who argued that its accusations were “absurd, unsupported” and that despite the leadership change, they needlessly prolonged unnecessary litigation.
Through it all, the incoming leadership change at the SEC under Paul Atkins may bring a fresh perspective to Crypto regulation.
Recall that on 4 December, U.S. President-elect Donald Trump nominated Atkins (a former SEC commissioner) to lead the agency.
Nomination of Paul Atkins
Trump called Atkins a "proven leader for common sense regulations" amid approval from industry leaders like Pantera's chief legal officer, Katrina Paglia, and Bitwise Asset Management general counsel Katherine Dowling.
So far, most of the speculation revolves around Trump's pro-crypto stance and Atkins' history as a Crypto advocate.
Analysts also expect that multiple Solana ETFs could receive approval at the same time once the regulatory environment stabilizes, just like it was with Bitcoin and Ethereum.
Overall, while the SEC's rejection of the Spot Solana ETF applications shows the outgoing administration's stance on Crypto, the upcoming leadership change could offer renewed hope for the Crypto industry.
Investors and stakeholders will closely watch how the narrative changes in 2025, especially as the U.S. prepares for more milestones in Crypto adoption.
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