SEC May Expedite the Review Process for Several Solana (SOL) Exchange-Traded Funds (ETFs)

The U.S. Securities and Exchange Commission (SEC) is reportedly expediting the review process for several Solana exchange-traded fund (ETF) proposals

The U.S. Securities and Exchange Commission (SEC) is reportedly speeding up the review process for several Solana exchange-traded fund (ETF) proposals, sources familiar with the matter told Bloomberg on Thursday.

The regulator has requested that issuers submit updated S-1 filings, key registration documents for new securities, within the next week. Industry insiders interpret this move as a sign that the SEC could issue approvals within three to five weeks.

If accurate, spot Solana ETFs could gain approval as early as July, which is months ahead of the final decision deadlines that extend into October. The SEC is expected to return comments on the S-1 filings within 30 days of submission, setting the stage for a summer rollout.

Sources also confirmed that the agency has been in close dialogue with ETF sponsors about critical components of the products, including how investor redemptions would work in crypto markets.

SEC May Allow Staking in Solana ETFs

Notably, the SEC is probing whether staking, a mechanism by which investors can earn yield by supporting the Solana network, will be integrated into the ETFs. While typically a contentious issue in regulatory circles, the SEC is reportedly open to allowing staking as part of these investment vehicles.

“If staking gets approved, it changes the game,” wrote one crypto enthusiast, known as Crypto Racoon, on social platform X.

If staking gets approved, it changes the game

— Crypto Racoon (@Crypto_Racoon) June 15, 2024

A who’s who of asset management firms are in line to offer Solana ETFs, including Grayscale, VanEck, 21Shares, Bitwise, Franklin Templeton, and Canary Capital. Many of these firms have been in active discussions with the SEC and its crypto-specific task force to finalize details, according to Bloomberg ETF analyst James Seyffart.

According to Seyffart and fellow Bloomberg analyst Eric Balchunas, the probability of Solana ETF approval in 2024 now stands at 90%, mirroring the odds for a potential Litecoin ETF.

“We think the SEC may now focus on handling 19b-4 filings for Solana and staking ETFs earlier than planned,” Seyffart noted this week.

Would love to hear directly from Atkins, but all good chance of happening. Here’s our latest odds of approval for all the dif spot ETFs via @JSeyff https://t.co/nLhYJJmO9U pic.twitter.com/4AcJVwhics

— Eric Balchunas (@EricBalchunas) June 14, 2024

Grayscale is once again leading the charge with its strategy to convert its existing Solana Trust into a spot ETF, a regulatory playbook that proved successful with both its Bitcoin and Ethereum offerings. The SEC delayed a decision on Grayscale’s proposal in May, calling it a procedural move rather than a rejection.

Delays were also issued for similar filings by Franklin Templeton, VanEck, and Fidelity in late April and May.

The acceleration in the Solana ETF review follows a landmark year for crypto ETFs. The SEC gave the green light to spot Bitcoin ETFs in January and approved Ethereum ETFs in May, marking a turning point for institutional crypto access.

Following the news, Solana (SOL) saw a 4% uptick in price, trading near $165 at the time of writing, according to CoinMarketCap data.

Market sentiment remains bullish, with investors betting that Solana may soon join the ranks of Bitcoin and Ethereum as a regulated investment product on Wall Street.

As the SEC opens new doors for crypto ETFs and possibly staking, the crypto asset class edges closer to mainstream adoption, with Solana now standing squarely in the spotlight.