SEC delays decision on Bitwise, 21Shares Solana ETF applications, opens public consultation

The US Securities and Exchange Commission (SEC) extended its review of two high-profile proposals for spot Solana (SOL) exchange-traded funds, signaling further delays in the approval process for crypto-linked investment products.

The agency said it would begin a new round of proceedings to assess whether the ETF proposals from asset managers Bitwise and 21Shares comply with key provisions of the Securities Exchange Act.

Specifically, the SEC cited concerns related to market manipulation and investor protection, factors it is obligated to weigh before granting any ETF listing.

Prolonged wait

Bitwise’s application, filed in January through Cboe’s BZX Exchange, and 21Shares’ separate proposal have now each been delayed at least once.

While both firms have experience offering crypto investment products, 21Shares already manages approved Bitcoin (BTC) and Ethereum (ETH) ETFs. The SEC has yet to authorize any fund tied to Solana, a blockchain often touted as a faster, lower-cost alternative to Ethereum.

The regulator said it is seeking additional public input and analytical time to determine whether the proposed rule changes would meet its standards for preventing fraud and ensuring investor confidence.

The regulator’s cautious tone suggests that Solana, despite its rising prominence, may face a longer path to ETF approval than its predecessors.

Regulatory inertia

The delay comes amid a broader regulatory bottleneck affecting several digital asset ETFs. The regulator has postponed decisions on several crypto ETFs in recent weeks and months. Nonetheless, optimism remains strong in the market.

Bloomberg analysts James Seyffart and Eric Balchunas have previously stated that they expect high chances of approval for most ETF applications, with the final green light anticipated sometime in the latter half of the year.

They estimated a 90% likelihood of eventual approval for both Solana and Litecoin (LTC) ETFs, attributing their optimism to favorable commodity classifications and rising institutional interest.

However, with final decisions potentially months away and broader policy uncertainty lingering, investors may be forced to wait until late 2025 for clarity on whether Solana ETFs will make it to US markets.

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