The United States Securities and Exchange Commission (SEC) has halted the progress of two proposed Solana ETFs, ostensibly on the grounds that the SEC regards the Solana token as an unregistered security under US law, according to a report by the Block.
The applications (known as 19b-4 applications) filed by Cboe BZX Exchange on behalf of the ETF’s issuer were rejected by the SEC, resulting in their withdrawal from the exchange’s website.
The continued regulatory scrutiny of the SEC, which is well documented, came after discussions between the SEC and the issuers, during which the SEC reportedly reiterated its view that Solana (SOL) should be classified as a security.
The SEC has argued that the SOL token is a security in multiple Court actions, but has not initiated any action directly against the developers of the Solana blockchain.
The 19b-4 applications are sometimes submitted by securities exchanges to initiate the SEC’s approval process for new financial products. However, since these applications were not accepted (unlike the Ethereum ETFs which were approved in July), they did not make it to the Federal Register for review.
The issuers behind the proposed Solana ETFs, 21Shares and VanEck, are still listed on the SEC’s EDGAR database, suggesting they have not abandoned their efforts entirely. Despite the setback, the issuers may seek to launch new arguments in order to gain approval.
The SEC has not made a public announcement regarding the rejection.
Written by M Bacina, S Pettigrove and L Misthos
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