Is Solana a security? Here’s why the SEC ditched SOL ETFs

• The SEC and exchange aggregator CBOE halted the process for a Solana ETF over concerns about SOL’s security status.
• The CBOE removed the 19b-4 filings, likely reflecting the regulator’s caution given earlier comments about SOL.
• Nate Geraci, an ETF expert, suggests that Solana ETFs have no chance of getting approved under the current US administration.
• Solana gains 2% to $147 on Tuesday.

The US Securities and Exchange Commission (SEC) has halted the filing process for Solana ETFs amid concerns about Solana’s status, according to a report from The Block. In a lawsuit filed against Coinbase, the SEC listed SOL as a security, raising questions about SOL’s potential status.

While there is no legal clarity on the status of SOL, exchange operator Chicago Board Options Exchange (CBOE) has opted to remove issuers’ 19b-4 filings from its website.

Solana extended gains on Tuesday, up nearly 2% at press time.

Solana ETF filings disappear from CBOE website

The CBOE has pulled the Solana ETF 19b-4 filings by issuers from its website during the ongoing discussion on the status of the asset. The SEC has raised concerns about SOL’s status, The Block reports.

The SEC and CBOE agreed not to file Forms 19b-4 with the Federal Register because that would move the approval process forward. It remains unclear whether issuers will file new documents for Solana ETFs in the future and push for legal clarity on the asset.

Matthew Sigel, head of digital asset research at VanEck, said on his X account that the firm believes SOL is a commodity, like Bitcoin and Ethereum. This belief is supported by informed legal perspectives, according to Sigel. The executive notes that Solana has made progress in decentralization, and the top 100 holders of the asset now control 27% of the supply, a significant reduction from 2023.

Sigel is quoted from a recent tweet on X:

We remain committed to supporting this position with our exchange partners to the appropriate regulatory authorities

XRP received legal clarity, Solana still in gray area

The SEC lawsuit against Ripple provided legal clarity to XRP in a ruling in 2023. Judge Analisa Torres ruled that secondary market sales of XRP are not securities.

The July 2023 ruling was upheld in the final outcome of the SEC vs. Ripple. Unless the SEC appeals the ruling, XRP enjoys non-security status when sold on exchanges while other altcoins like Solana wait.

The expert says Solana ETFs don’t stand a chance at the moment

Nate Geraci, president of investment adviser The ETF Store, said the Solana ETFs would have no chance of getting approved under President Biden’s administration in the US.

Crypto analyst Scott Melker notes that the SEC is likely to be cautious given its previous stance on SOL in lawsuits against exchanges like Coinbase and Kraken.

Solana is extending gains by nearly 2%, trading at $147 at the time of writing.