The US Securities and Exchange Commission has extended its review of four Solana ETF applications, citing concerns about market manipulation and investor protection. This affects applications from Bitwise, VanEck, 21Shares and Canary Digital, all of which are looking to bring spot Solana ETFs to US exchanges for the first time.
In a notice published on May 19, the SEC said it would “institute proceedings” to determine whether these proposals comply with the Exchange Act, specifically Section 6(b)(5) which requires listed securities to prevent fraud and protect the public interest. The delay adds to the growing list of delayed crypto ETF reviews, showing the SEC’s cautious approach to going beyond Bitcoin and Ethereum products.
Why the SEC Is Taking More Time
The agency isn’t saying no to the applications. It’s asking for public comment and more scrutiny on whether Solana’s market is robust enough to withstand manipulation to justify a US-listed ETF.
Officials say wash trading, price discovery on unregulated platforms and the general surveillance outlook are some of the issues the SEC is clearly still wrestling with, airing that while the delay was expected, approval is still possible, just not immediate.
Seyffart and his colleague Eric Balchunas previously predicted a 90% chance of approval for Solana and Litecoin ETFs by the end of 2025 if current regulatory momentum continues.
What Makes These Solana ETF Proposals Different?
Each proposal is slightly different but most follow the same model as recently approved spot Bitcoin ETFs. The Bitwise Solana ETF, filed through Cboe’s BZX Exchange, will hold SOL and use CME CF Solana-Dollar Reference Rate pricing.
21Shares, already has spot Bitcoin and Ethereum ETFs, is proposing a similar structure. Its growing portfolio of digital asset ETFs will give it an edge when regulatory clarity arrives.
VanEck’s filing is also a direct hold structure while Canary Digital is a new player in the ETF space looking to be the first to market with a Solana based product.
Bigger Picture: A Regulatory Bottleneck
While spot Bitcoin ETFs were approved in January, 2024 and Ethereum ETFs were approved in July of the same year, no altcoin ETF (including those for,Solana, XRP or Dogecoin) has been approved yet.
Despite institutional interest in Solana’s speed, low fees and growing DeFi ecosystem, the SEC is concerned about transparency and ability to monitor the underlying spot markets. The agency is especially hesitant to approve ETFs without strong surveillance sharing agreements in place.
This is a pattern, the SEC is saying it won’t approve any other ETFs without clear and provable resistance to manipulation.
Institutional Demand and Market Readiness
According to CoinShares, Solana-based investment products attracted over $43 million in inflows in the first quarter of 2025 alone, outperforming most other altcoin funds. Institutions are clearly interested, but regulators aren’t moving at the same pace.
VanEck, Bitwise, and others are banking on the fact that investor appetite, combined with maturing infrastructure such as the CME reference rate and clearer tax treatment, will help shift regulatory opinions in time.
What’s Next for Solana ETFs?
The SEC has not set a final decision date yet, but the current proceedings allow it to delay up to 240 days from the initial filing dates. Public comments are being accepted in the meantime, offering industry stakeholders a chance to argue for or against approval.
Analysts say that unless Congress or courts compel the SEC to act faster, timelines for Solana ETF approvals will likely stretch way into 2025. But given rising demand, applicants are hoping the wait will eventually pay off.
Conclusion
The delay in approving Solana ETFs shows the challenges of merging new technology with old regulatory frameworks. While investor interest in Solana is high, the SEC’s hesitance shows that institutional readiness isn’t enough without full compliance. The outcome of these proceedings will shape the future of altcoin-based investment products and whether Solana gets a seat at the ETF table alongside Bitcoin and Ethereum.
FAQs
What is the SEC’s main concern with Solana ETFs?
The SEC is primarily worried about market manipulation, lack of surveillance agreements, and whether Solana’s price is reliably tracked on regulated platforms.
When could Solana ETFs be approved?
Analysts like James Seyffart suggest the earliest realistic timeline is late 2025, depending on how the SEC views altcoin regulation and market maturity.
Why is the Solana ETF important?
It would be the first spot ETF for a non-Bitcoin, non-Ethereum asset, potentially opening the door for more altcoin-based investment vehicles.
Has any altcoin ETF been approved in the U.S.?
As of May 2025, only spot Bitcoin ETFs and Ethereum ETFs have received approval, all others are delayed.
Who filed for Solana ETFs?
Bitwise, 21Shares, VanEck, and Canary Digital have all submitted filings, most of which propose direct-hold ETFs tracking SOL via CME rates.
Glossary
ETF (Exchange-Traded Fund): A type of investment fund traded on stock exchanges, holding assets like stocks or cryptocurrencies.
SOL: The native cryptocurrency of the Solana network, used for transactions and staking.
Spot ETF: An ETF that holds the actual underlying asset rather than derivatives or futures.
Exchange Act Section 6(b)(5): A section of U.S. securities law requiring that ETFs prevent fraud and manipulation and protect the public interest.
Surveillance-Sharing Agreement: An agreement between exchanges to monitor trading and detect manipulation, often required for ETF approvals.
Sources
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