21Shares has become the second exchange-traded fund issuer to file an application with the SEC to launch a Solana spot ETF in the US market.
Hours after VanEck's Solana ETF application was submitted, the U.S. Securities and Exchange Commission (SEC) received a new fund application from 21Shares.
The exchange-traded products company has teamed up with VanEck to seek regulatory approval for a Solana spot ETF on U.S. soil. 21Shares’ application was filed on Friday, June 28, with the goal of launching an exchange-traded fund that would allow U.S. investors to gain exposure to the Solana blockchain network’s native cryptocurrency, SOL.
According to presentationThe ETF is “designed to mirror the performance of SOL in US dollars,” providing investors with direct exposure to the cryptocurrency’s market price.
The SEC and Solana's classification
The Securities and Exchange Commission considers SOL to be an unregistered security. In fact, last year, the federal regulator mentioned Solana’s cryptocurrency in a lawsuit it filed against the Binance platform, alleging unregulated securities trading.
Although the Solana Foundation, which backs blockchain development, responded in disagreement with the SEC, the agency did explain at length why SOL is considered a security and why it should be regulated under U.S. law.
However, despite this consideration, the SEC has not yet officially declared the cryptocurrency a security, which has increased the uncertainty surrounding this cryptoasset. Therefore, amidst this indecision regarding the classification of Solana (SOL), 21Shares added a provision in its presentation prospectus considering the closure of the investment fund in the event that SOL is officially classified as a security by the SEC and the fund sponsors decide not to comply with the additional regulatory requirements for its maintenance.
Solana Labs filed forms for the offer and sale of securities
According to the SEC, Solana Labs, the largest contributor to the Solana network, filed several forms in 2020 for the sale and issuance of rights to receive Solana tokens in the future, through simple agreement for future tokens (SAFTs). Solana Labs sold approximately 177 million SOL, raising over $23 million at the time.
In March of that same year, it held a “Dutch auction” in which it made additional sales of SOL using the CoinList trading platform. Also, in 2021, the company held a private sale of SOL in which it raised more than $300 million from investors, who signed a token purchase agreement and made payments in fiat currency and cash. SOL subsequently began trading on US cryptocurrency platforms, while information disseminated by Solana Labs led investors and holders of the cryptocurrency to believe that it was an investment from which they could profit in the future, alleged the SEC.
The SEC also noted that Solana Labs publicly stated that it would use the funds raised in these offerings to develop and expand the protocol, in order to increase its use and adoption and potentially increase the value of the cryptocurrency.
Despite the regulatory uncertainty surrounding SOL, experts believe it may be possible for the SEC to approve spot ETFs for the cryptocurrency, which could have a fairly significant impact on its price and the crypto market in general.
SOL is trading at around $140 dollars
The filing of a new Solana spot ETF application has not significantly impacted the price of the cryptocurrency, which, at the time of writing, is trading around $140 per unit.
According to data consulted on the CoinMarketCap platform, the price of SOL has corrected by 6,26% in the last 24 hours. Still, Solana remains the fifth most capitalized cryptocurrency, with a market value of $64.800 billion. In the last week, SOL growth is 4%.
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