[NEWS] SEC in talks with ETF issuer about Solana being a security

The U.S. Securities and Exchange Commission (SEC) has held talks with the proposed Solana (SOL) ETF issuer about whether Solana is classified as a security before Cboe removed the related 19b-4 form from its website.

The Block, a blockchain media outlet, reported.

Cboe's BZX expressed concerns about whether Solana is a security before removing the related 19b-4 filing, citing sources familiar with the matter. The issuer is investment firm 21Shares.

As a result of the talks, the SEC and Cboe agreed not to file a 19b-4 form in the Federal Register that would have started the approval process, the SEC said.

If it did, the SEC would have been pressured into making a decision to approve the Solana spot ETF.

The 19b-4 filings, which the exchange files on behalf of issuers, are no longer posted on Cboe's website. It is also not currently listed in the Federal Register.

For the Solana spot ETF to be approved, the 19b-4 form must be approved and the S-1 registration statement must be effective. There is no specific deadline set for the S-1 form to the SEC.

VanEck's S-1 registration statement for the Solana spot ETF is still listed on EDGAR, the SEC's filing system.

21Shares' S-1 registration statement filing is no longer visible in search engines, but the direct link still works.

The SEC's stance was not a surprise to the issuer, according to sources, given that the agency has previously called Solana a security in multiple court filings.

The idea that these filings could be blocked is also not surprising.

Approval difficult under current administration

Sources said new filings or amendments to 19b-4 could be filed in the future, which could strengthen the argument that Solana is not a security. Audrey Belloff, head of communications at 21Shares, said: "We cannot comment on the regulatory process at this time. We remain committed to expanding investor access to crypto assets in the U.S. market and around the world."

While both Bitcoin (BTC) and Ethereum (ETH) spot ETFs have cleared the necessary regulatory hurdles and begun trading, most market participants expected the SEC to be cautious about the Solana Fund.

On the 17th, Nate Geraci, president of investment advisory firm ETF Store, said the Solana spot ETF is unlikely to be approved under the current Biden administration.

Reference: The Block
Image: Shutterstock

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