The US Securities and Exchange Commission (SEC) has announced that it will be extending its review of two proposed Solana (SOL) exchange-traded funds (ETFs), causing further delays in the approval process for these crypto-linked investment products. The agency has stated that it will be conducting a new round of proceedings to evaluate whether the ETF proposals from asset managers Bitwise and 21Shares comply with key provisions of the Securities Exchange Act.
One of the main concerns cited by the SEC is related to market manipulation and investor protection, which are crucial factors that need to be considered before granting any ETF listing. This delay marks the second time that both Bitwise and 21Shares have had their proposals pushed back, with the SEC seeking additional public input and analytical time to make a decision.
While both companies have experience in offering crypto investment products, 21Shares already manages approved Bitcoin (BTC) and Ethereum (ETH) ETFs. However, the SEC has yet to approve any fund tied to Solana, despite its growing popularity as a faster and lower-cost alternative to Ethereum.
The regulatory inertia surrounding the approval of digital asset ETFs has been a common theme in recent months, with the SEC postponing decisions on multiple crypto ETFs. Despite this, analysts at Bloomberg, James Seyffart and Eric Balchunas, remain optimistic about the approval of most ETF applications, including those for Solana and Litecoin (LTC). They estimate a 90% likelihood of eventual approval for these ETFs, citing favorable commodity classifications and increasing institutional interest.
However, with final decisions potentially months away and ongoing policy uncertainty, investors may have to wait until late 2025 for clarity on whether Solana ETFs will be available in US markets. The regulatory delays underscore the challenges that come with introducing new crypto investment products into traditional financial markets, highlighting the need for thorough evaluation and consideration of market risks and investor protection.