Grayscale’s Solana ETF: Will the SEC Finally Give the Green Light?, Report

• The SEC has acknowledged Grayscale’s amended application for a Solana ETF, a shift from previous rejections under Chair Gary Gensler.
• Legal experts highlight that the SEC’s classification of Solana as a security complicates its evaluation for a commodities ETF approval.
• The approval timeline for the Solana ETF remains uncertain, with predictions ranging from late 2024 to as far as 2026 due to review delays.

The U.S. Securities and Exchange Commission (SEC) has finally responded to Grayscale’s amended application to list Solana (SOL) Exchange-Traded Fund. This is a significant change compared to the previous Solana ETF rejections that the commission made under Gary Gensler as the SEC chairpersons. Those were mainly influenced by regulatory issues resulting from categorizing Solana’s products as commodity trust shares.

Challenges in Solana ETF Approval

Finance lawyer Scott Johnsson shared his insights about the situation that the refusals made by the SEC have arisen due to the classification of SOL. The regulator has always dealt with Solana in a way that has made it impossible to categorize it under the commodities ETF. As noted by the Bloomberg analyst James Seyffart in January, the SEC’s Division of Enforcement now categorizes SOL as a security. Due to this classification it has been difficult to evaluate SOL under the commodities bucket that is essential in getting an ETF approval.

The flow of most experts has not been definite on the approval of the Solana ETF, which has made it difficult to provide an accurate timeline. Nate Geraci, President of ETF store recommended that approval could be as early as by end of next year given the massive interaction of the SEC with issuers this year. 

Crypto ETF Market Growth

On the same, Seyffart said that approval may take up to the year 2026, stating that the SEC normally takes 240 to 260 days to review such filings. Since there is no definite way in which this will be done, this has led to much debate on the timing in question.

This recognition of Grayscale’s application comes as the market sees higher interest in the known crypto ETFs. Several major applicants such as 21Shares, Bitwise, VanEck, and Canary Capital are all seeking to get their spot Solana ETFs. 

On January 28, the Cboe BZX Exchange filed 19b-4 forms for these issues, which signified a significant development in the campaign for approval. The pressure to approve rises as competition intensifies reflecting the steady trend of investors seeking crypto-related financial services.

However, besides SOL, there are many more applications from those wishing to launch a crypto ETF under consideration by the SEC. Grayscale has applied for a Litecoin, and BlackRock seeks to make alterations through in-kind options for its iShares Bitcoin ETF. These filings indicate the increase in the market of cryptocurrencies investment products.