- VanEck’s Solana ETF Faces Regulatory Hurdles
- Analysts are banking on vague legal precedent.
- Disagreements with the SEC may be resolved in court.
The U.S. cryptocurrency industry has long suffered from regulatory uncertainty, especially when it comes to altcoins like Solana, which U.S. securities regulators consider to be securities. This status has far-reaching implications, especially for potential altcoin exchange-traded funds (ETFs).
Most recently, VanEck, the issuer of the hopeful Solana ETF, made the case for the fund. The analyst pointed to previous legal precedents that, in his opinion, hold the key to Solana’s classification and ETF approval.
Legal precedent points to Solana as a commodity.
Another major development in the debate over the legal status of the Solana ETF occurred on Tuesday, August 20. Matthew Sigel, head of digital asset research at VanEck, found a legal case that has significant implications for the Solana ETF.
The key case is Commodity Futures Trading Commission (CFTC) v. My Big Coin in 2018. In that case, a U.S. district court ruled against the defendants, who argued that the token, My Big Coin (MBC), was not a commodity because it was not mentioned in a futures contract. The court disagreed, noting that the CEA’s definition of a commodity extends to “all goods and articles… and all services, rights, and interests… anything that is subject to a future contract for delivery, whether present or future.”
The court also extended the natural gas analogy further, explaining that there may be a futures contract for gas to be delivered to a specific location. Nevertheless, natural gas is still treated as a commodity. This is important to Solana, which currently does not have a futures contract.
How the 2018 Ruling Applies to Solana ETFs
Siegel argues that this precedent could apply to Solana, potentially classifying it as a commodity regardless of whether or not a futures contract exists. This classification is important for approving a Solana ETF, as commodities like Bitcoin and Ether have already found success in the ETF market.
However, other major players disagree. These include the SEC and Cboe, the major venue for ETFs. Cboe recently removed VanEck’s Solana ETF filing from its website due to SEC concerns.
VanEck remains optimistic, and Sigel noted that the S-1 filing for the ETF is still pending. This ongoing uncertainty highlights the challenges facing all altcoin ETFs in the United States.
On the other side
- Recently approved Brazil’s Solana ETF It’s another sign of global regulatory changes that could impact the U.S. political landscape.
- VanEck’s Sigel previously said the Solana ETF hinges largely on: Leadership change At the SEC. But there will be no change before the US general election.
Why this matters
Classifying Solana as a commodity or security has important implications for all altcoins in the current regulatory environment. If Solana were a commodity, it would be outside the jurisdiction of the SEC, which has taken a hard line on cryptocurrencies.
Learn more about the Solana ETF:
Solana ETF on Hold? Here’s Why VanEck Is Still Hoping
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