SEC Delays Decision on Solana ETFs Citing Market Manipulation Concerns

The U.S. Securities and Exchange Commission (SEC) has officially delayed its decision on multiple spot Solana (SOL) exchange-traded fund (ETF) applications submitted by leading asset managers such as Bitwise, 21Shares, VanEck, Canary Capital, and Fidelity. The decision, announced on May 19, 2025, is part of the regulatory body’s broader caution toward crypto-based ETFs that are not tied to Bitcoin or Ethereum.

The delay stems from unresolved concerns regarding potential market manipulation and the need to ensure stronger investor protection mechanisms. The Commission stated that more time is needed to evaluate whether the proposed ETFs meet regulatory standards designed to prevent fraud and manipulation in the market. As a result, the SEC has initiated formal proceedings to assess the ETF filings in greater detail. This includes opening a public comment period, during which stakeholders and the public can submit feedback to support or oppose the approval of these products.

This delay is not unique to Solana. While the SEC has approved spot Bitcoin ETFs and recently greenlit Ethereum ETFs, the Commission continues to scrutinize products based on other cryptocurrencies such as Solana, XRP, and Dogecoin. These altcoin ETF proposals remain in limbo as regulatory agencies weigh the risks tied to their respective market structures and liquidity. Notably, this delay does not amount to a rejection. The SEC clarified that initiating proceedings does not indicate any conclusions have been reached regarding the eligibility or viability of the ETF proposals.

Despite the regulatory setback, market sentiment around Solana remains cautiously optimistic. According to analysts' forecasts, there is a 70% likelihood of approval for Solana ETFs by the end of 2025. Their optimism is echoed by a modest uptick in the Solana price following the news, indicating that investors are still hopeful for eventual approval. The interest in Solana ETFs underscores the growing demand for diversified crypto investment products in regulated markets. An approval would provide institutional and retail investors alike with easier access to Solana exposure, potentially boosting liquidity and credibility for the Solana ecosystem.

The SEC’s delay in deciding on Solana ETFs highlights the regulatory complexities surrounding non-Bitcoin crypto assets. As the agency invites further comments and conducts more thorough evaluations, the crypto industry will be watching closely. Whether these ETFs are ultimately approved could shape the next phase of institutional adoption for Solana and similar digital assets.

The SEC has once again delayed its decision on two major Solana (SOL) spot ETF applications submitted by Bitwise and 21Shares. This delay comes as the SEC initiates new proceedings to determine if these ETFs meet the necessary legal standards for approval. The commission cited concerns related to market manipulation and investor protection as key factors in its decision to extend the review period. This is not the first time the SEC has postponed a ruling on these applications; Bitwise filed its application in January through Cboe’s BZX Exchange, while 21Shares had filed its application even earlier. The SEC first postponed Bitwise's application in March and has now extended the review again.

The SEC's delay is crucial to ensure that the proposed ETFs comply with the rules under the Securities Exchange Act, which involves safeguarding investors' interests and preventing fraudulent activities or market manipulation. In its official statement, the commission indicated that it requires more time to study the proposals and accumulate public comments. This extended review process may reflect concerns about the market stability of the currency or trading practices, even though Solana is considered a faster and low-cost blockchain compared to Ethereum.

The delay is not limited to Solana ETFs. The SEC has also slowed down its decision on the SOL ETF applied by Grayscale, and many other digital asset ETFs are facing similar delays. While investors are eager to see more crypto-related products in conventional finance, the SEC is proceeding with caution. Despite these delays, some experts remain optimistic. However, the lack of approval by regulators may be hampering the market growth of Solana.

The recent introduction of Solana futures by the CME Group indicates that there is demand for regulated Solana-based investment vehicles. However, a spot ETF would facilitate everyday investors to get exposure to Solana via normal brokerage accounts. The SEC will likely take a few more months before making a final ruling. Some experts have opined that definitive answers may not be seen until later in 2025. Investors need to remain patient while regulatory difficulties continue to shape the future of crypto products. For the moment, the vision of having Solana ETFs listed on U.S. exchanges continues to exist but remains in suspension.