Once more into the SOL ETF breach

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This week saw a new — though perhaps unsurprising — entrant in the race to offer up a new SOL vehicle to would-be institutional investors.

Canary Capital Group’s Wednesday filing for a spot SOL ETF with the SEC comes a few months after VanEck kicked off the process with a filing of its own. 

The fresh filing is a cause for celebration, certainly — especially if you’re of the opinion/hope that next week’s election will usher in a far less, shall we say, Gensler-ish take on US securities oversight. Sitting SEC commissioners on the Republican side are of the view that investors, not regulators, should judge the merits of such products, and in the event that Donald Trump prevails, Chair Gary Gensler may find himself out of a job sooner than later.

Barring a fundamental sea change, the SEC’s ongoing contention that SOL is a security may prove a significant roadblock. Any attempt to read the spilled tea leaves is tricky in an election year, but under Gensler, SOL sort of seems to be a hill the agency’s court lawyers are willing to die on. At the same time, the fact that the SEC is trying to unwind its language around so-called “crypto asset securities” suggests that things are far more fluid than ominous legal language might indicate. 

This editor is of the opinion that the march of time is the best instructor here. Wind back the clock to 2014/2015 and the prospects for a bitcoin ETF looked downright dire, nothing more than a waste of Winklevoss cash. Now we’ve got options on spot bitcoin and ether ETFs. Does that guarantee a solana ETF’s success? No, but nor does it spell a death sentence, neither. 

Things are all just a little bit up in the air now, as they were — checking my calendar here — nearly a decade ago.

Earlier this year, the crypto-friendly SEC Commissioner Hester Pearce acknowledged this reality, telling crypto outlet Coinage: 

“This environment with crypto is so difficult, of course, because there are questions around what my colleagues and I are going to think is a security and not — there are all these kinds of questions. But again, we really should just take the existing precedent and apply it to whatever the facts and circumstances are.”

As with so much in crypto right now, next week’s election is likely to be the deciding factor here. Stay tuned, as they say.

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