SEC Speeds Up Solana ETF Approval Process After SSK Launch

The U.S. Securities and Exchange Commission (SEC) has expedited the approval process for Solana-based exchange-traded fund (ETF) applications, requesting organizations to revise and resubmit their S-1 files by the end of July. This move aims to prevent any unexpected advantages with the launch of new products and to maintain market fairness. Although the authorities have until October to make a decision, it is anticipated that the revised documents might be submitted earlier.

This acceleration comes in the wake of the recent launch of the REX-Osprey SOL and Staking ETF (SSK), which completed the necessary procedures in the U.S. and began trading. The SSK product, filed under the Investment Companies Act of 1940, was automatically approved unless the SEC intervened. This ‘open clause’ led to a surprising market entry of the product, prompting regulators to expedite their process to ensure a level playing field.

One official noted the significant pressure on the SEC to proceed faster, especially after the recent approval of the Rex Shares product. This indicates expectations to prevent the SSK ETF from gaining an advantage over other Solana ETFs. The SEC’s approach to ETF applications for different crypto assets has been under scrutiny, with recent developments such as the halt in the approval of Grayscale’s crypto basket ETF due to potentially controversial assets like XRP and ADA, which do not have independent ETFs. These actions highlight the SEC’s occasionally rapid progress in the approval process.

The crypto market is placing continuous pressure on regulatory bodies to prevent unexpected product approvals or delays. Officials emphasize their aim to conduct the process fairly and balanced, ensuring that all products meet the necessary standards before approval. The SEC’s stay order on Grayscale's GDLC ETF is procedural, allowing the company to submit legal briefs urging the commission to affirm the staff approval. Similarly, the SEC's decision to delay its evaluation of Fidelity's spot Solana ETF is part of this thorough assessment process.

Solana is increasingly attracting the attention of institutional companies due to rising developer and investor interest. In June, investment bank Cantor Fitzgerald highlighted the rapidly growing interest in Solana, predicting that more companies might start incorporating this asset into their treasury. The bank also remarked that companies believe Solana might surpass Ethereum in the long run. This increasing institutional adoption may boost demand for Solana ETFs, and the rapid approval of potential ETF benchmarks could enhance market diversity and competition.

Analysts believe the SEC’s prompt action is crucial for market balance. Fair process conduct is vital for offering different products to investors simultaneously. Regulatory steps in the crypto asset market and the approval process of applications are becoming more closely observed each day. Achieving balance in products with substantial market share remains significant for both companies and investors. The growing interest in Solana and accelerated applications signal potential significant shifts in the industry.