The US Securities and Exchange Commission (SEC) deferred its ruling on the spot Solana ETF proposal. The filing is from NYSE Arca seeking the listing of the shares of the Grayscale Solana Trust. The filing saw a February amendment.
The commission then starts the process of whether the plan should be approved or not. The SEC initiated such an examination process under regulations intended to safeguard investors.
The trust would solely own SOL, and its value would be monitored by the CoinDesk Solana Price Index. The Trust issues and redeems shares in blocks of 10,000 in the form of cash transactions. This format is similar to other commodity-based trusts that have already gone public.
SEC seeks insight as crypto waits
The SEC is now accepting public comment. It is seeking comment on potential risks, price manipulation, and protection of the investors. The agency took no stand. It merely expressed that the issue required more analysis before a final action.
The crypto world is keeping a close eye on this. The result should inform how other asset-backed crypto offerings are handled by regulators. The next deadlines in June are the focus of eyes now. Polkadot and XRP ETF decisions should follow shortly. Any forward movement there or stall there might set the stage for digital asset investing in the U.S.
It is indicative of a bigger problem. Crypto markets develop quickly but regulation is sluggish. Trust-based ETFs provide access to digital assets with the benefit of not requiring wallets or holdings.
Despite that, regulators tend to concern themselves with fraud and price problems associated with these tokens. Spot Bitcoin ETFs have already received the SEC’s blessing earlier this year. It provided some encouragement for similar deals. There is a difference with each case, however.
Solana faces tougher SEC scrutiny
Solana’s case is peculiar. It does not have the same market cap and history of trades as that of Bitcoin. It makes it more difficult for the SEC to utilize the same criteria.
The agency then opens the door for public input. It welcomes the public and market participants themselves to comment. The commission is interested in whether the proposal is fraud-proof and complies with the public interest standard. A decision is not reached for several weeks or even months.
In the meantime, the crypto market is holding back. Investors, analysts, and developers wait. The fate of crypto ETFs is potentially in the balance of what is next with Solana. Whatever the SEC does next has the potential to revolutionize digital finance for the foreseeable future.
