- Altcoin holders have some hope as SEC amends Binance lawsuit
- The move appears to be a strategic move by the agency.
- Experts Explain Why SEC Changes Won’t Improve the Chances of a Solana ETF Approval
Altcoin traders have welcomed the latest development in the Binance lawsuit as the U.S. Securities and Exchange Commission (SEC) has revised its charges against altcoins. In particular, the SEC is now trying to avoid setting a precedent on whether these altcoins, including Solana (SOL), are securities.
Many altcoin holders welcomed the decision as a victory, as this ruling could set a precedent for all altcoins. They also hoped that this would pave the way for a Solana exchange-traded fund (ETF), thus attracting more investors to SOL. However, several analysts suggest that this outcome is unlikely.
What the SEC’s Solana Concession Means
The SEC’s recent legal maneuver has received significant attention. On July 30, the SEC filed a document amending its claims in its lawsuit against Binance, which originally classified several altcoins, including Solana, as unregistered securities.
The purpose of this amendment is to avoid the court setting a legal precedent on whether altcoins are securities or not. In other words, if altcoins were classified as securities, centralized cryptocurrency exchanges would not be able to list them as they currently do, which would significantly reduce their value. Conversely, a different ruling would effectively remove the SEC’s authority over altcoins, which is exactly what the SEC is trying to avoid.
Because of these risks, analysts believe the SEC has not changed its stance on altcoins like Solana. For example, cryptocurrency lawyer Jake Cherinksy believes the SEC may be making a tactical move and waiting for a better case to set a precedent for altcoins. That’s not good news for the Solana ETF.
Solana ETF possibility remains unchanged
The outlook for a Solana ETF under current leadership is low, as the SEC has argued that altcoins like Solana are securities in other cases. Nate Geraci, co-founder of the ETF Institute, explained on Wednesday, July 31, what needs to happen for a Solana ETF to become a reality.
According to Geraci, Solana ETF approval depends on one of three major developments: First, Solana does not currently have a CME-traded Solana futures contract with sufficient trading history. Of note are the requirements that both Bitcoin and Ethereum must meet before approval.
If lawmakers adopt a comprehensive cryptocurrency regulatory framework, a Solana ETF could become a reality. In that case, the SEC would have to reassess its approach. Or, the current administration could change its leadership.
All of these factors mean that the Solana ETF is unlikely to be approved this year, as are all other ETF candidates, including Ripple.
On the other side
- The SEC’s retreat from setting a precedent underscores the regulatory uncertainty surrounding cryptocurrencies. Without a clear legal precedent, altcoin holders are left in the dark about the future.
- Previously, crypto influencers and some media outlets published unconfirmed reports that BlackRock was filing its own ETF. The company’s executives denied this In a subsequent statement:
Why this matters
The SEC’s legal action will have a significant impact on the altcoin market. If altcoins are ultimately classified as securities, the SEC will likely restrict trading on centralized exchanges. This will have a significant negative impact on altcoin liquidity and prices.
Learn more about Solana and other altcoin ETFs:
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