SEC Extends Review of Solana ETF Proposals, Citing Market Manipulation Concerns

The US Securities and Exchange Commission (SEC) has extended its review of two prominent proposals for spot Solana (SOL) exchange-traded funds (ETFs), indicating further delays in the approval process for crypto-linked investment products. The agency announced that it would initiate a new round of proceedings to evaluate whether the ETF proposals from asset managers Bitwise and 21Shares meet key provisions of the Securities Exchange Act.

The SEC highlighted concerns related to market manipulation and investor protection, which are critical factors it must consider before approving any ETF listing. This move comes as both Bitwise’s application, submitted in January through Cboe’s BZX Exchange, and 21Shares’ separate proposal have already been delayed at least once. While both firms have experience in 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 promoted as a faster and lower-cost alternative to Ethereum.

The regulator stated that 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 cautious tone from the SEC suggests that Solana, despite its growing prominence, may face a longer path to ETF approval compared to its predecessors.

This delay is part of a broader regulatory bottleneck affecting several digital asset ETFs. The regulator has postponed decisions on several crypto ETFs in recent weeks and months. However, optimism remains strong in the market. Analysts 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 attributed 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.