Opinion: The U.S. SEC clearly states that Solana is a security, ETF approval may have to wait for the regulatory term to change

Investment management company VanEck has applied to launch a Solana ETF, tracking the price of Solana's native token. Many analysts have said that after the U.S. Securities and Exchange Commission (SEC) recently greenlighted an Ethereum-based ETF, it was inevitable for the market to apply for a Solana ETF, but few doubted its immediate success.

Haseeb Qureshi, partner at investment firm Dragonfly Capital, said: "This is impossible to accomplish. I suspect VanEck is building goodwill and laying groundwork for future launches." "But the SEC has made it clear that they consider SOL as a security. This administration will not back down on this issue." James Seyffart, an ETF expert at Bloomberg Intelligence also agreed with this view; he stated on X that the fund would only have a chance of launching sometime in 2025 if there were new leadership at both The White House and SEC.

The biggest legal hurdle facing SOL ETF is that SEC's enforcement division explicitly states SOL as an unregistered security. Notably, this happened one year ago when Binance was sued by the agency for having markets in Solana and 11 other cryptocurrencies. The SEC's opinion is based on securities laws passed in early 1930s and Howey Test which determines what constitutes a "security investment". Essentially speaking, if someone invests money into a common enterprise expecting profits from others' labor then SEC can declare such asset as security.