The US Securities and Exchange Commission (SEC) has officially acknowledged Grayscale’s applications for exchange-traded funds (ETFs) based on Solana ($SOL) and Litecoin ($LTC).
This means the regulator is now opening these proposals for public feedback. While this doesn’t mean the ETFs have been approved yet, it is a crucial step in the process.
The SEC’s decision is especially important for Solana, as this is the first time the regulator has recognised an ETF filing for the digital asset.
Many experts see this as a potential sign that the SEC’s attitude toward cryptocurrency investments might be changing.
The move comes during a period of leadership changes at the SEC, which has raised hopes that the agency could become more open to crypto investment products.
On 6 February, the SEC announced that the public would have 21 days from the date of publication in the Federal Register to submit comments on these ETF applications.
SEC recognises SOL ETF after previous rejections
Solana ETF filing is making headlines because of the SEC’s previous reluctance to consider it.
The agency had previously declined similar proposals and even classified Solana as a security in legal cases against crypto firms.
ETF analyst at Bloomberg, James Seyffart, described the SEC’s latest move as a major moment. He pointed out that the regulator had rejected Solana ETF applications in the past, so this new development suggests that the SEC’s stance might be evolving.
Fox Business journalist, Eleanor Terrett, also commented on the situation, noting that while former SEC Chair Gary Gensler was in charge, the agency had pressured the Chicago Board Options Exchange (Cboe) to withdraw previous Solana ETF applications.
This recent decision to acknowledge the filings could indicate a change in direction under new leadership.
Bloomberg’s senior ETF analyst, Eric Balchunas, also weighed in, calling the move a small but important step. “It is remarkable because it is the first time that an ETF tracking a coin that was previously called a ‘security’ is recognised by the SEC”, Balchunas wrote in a post on social media.
He also noted that just six weeks ago, the SEC under Gensler had told the Cboe to withdraw its Solana ETF filing, making this shift even more significant.
With the SEC now formally reviewing Solana ETF applications, the Cboe has resubmitted 19b-4 filings on behalf of several investment firms, including Bitwise, VanEck, 21Shares, and Canary Capital.
Analysts estimate that the SEC will make a final decision on Solana ETFs by 11 October.
Litecoin ETF also moves forward
In addition to Solana, the SEC has also acknowledged an application for a Grayscale Litecoin ETF. This marks the second time the agency has considered a Litecoin ETF.
Analysts believe that if a new crypto ETF is approved soon, Litecoin could be one of the next in line.
Grayscale has been actively expanding its cryptocurrency ETF offerings. Its latest move includes filing to list its Litecoin Trust on the New York Stock Exchange (NYSE).
Now that the SEC has acknowledged the filing, the regulator is required to either approve or reject the application within a specific timeframe.
At the same time, another major ETF development is taking place with BlackRock’s iShares Bitcoin ETF. The SEC recently acknowledged a Nasdaq filing related to in-kind creations and redemptions for this ETF. This change would make it easier for investors to trade Bitcoin ETFs, making them more efficient.
The president of The ETF Store, Nate Geraci, described the SEC’s decision as necessary but criticised how long it had taken. “This should have happened a long time ago”, Geraci said, reflecting frustration among investors and firms waiting for regulatory approvals.
SEC cuts crypto task force, sparking concerns
The SEC’s decisions on crypto ETFs are happening at the same time as internal changes within the agency. Recently, the SEC reduced the size of its crypto task force, a specialised unit focused on cryptocurrency regulation.
This team originally had more than 50 lawyers and staff members but is now being downsized under the current administration. Some members have been reassigned to other departments, leading to concerns about the future of crypto oversight.
This task force was created to prevent fraud and market manipulation in the cryptocurrency sector. With its size now shrinking, some experts worry that the SEC might take a more hands-off approach to regulating digital assets.
Others believe that the shift could signal a move toward a more favourable regulatory environment for crypto investments.
Meanwhile, the Cboe BZX Exchange has also submitted 19b-4 filings for XRP ETFs on behalf of asset management firms, including Bitwise, 21Shares, Canary Capital, and WisdomTree.
This filing is another important step in the process of launching an XRP ETF. If the SEC acknowledges it, the regulator will have 240 days to decide whether to approve or reject the product.
The SEC’s growing number of cryptocurrency ETF applications reflects increasing institutional interest in digital assets.
Many investors and analysts are watching closely to see whether the regulator will finally approve ETFs for assets like Solana, Litecoin, and XRP.
What’s next for crypto ETFs?
The SEC’s recent decisions suggest that the agency is at least willing to consider more cryptocurrency ETFs, but approval is still not guaranteed. While some analysts are optimistic, others remain cautious.
The SEC’s position on crypto regulation is still evolving, and there are no clear indications of how these filings will be handled in the coming months.
However, the changing leadership at the SEC, combined with the recent acknowledgment of Solana and Litecoin ETF applications, has given crypto investors new hope.
The fact that the SEC is reviewing these filings at all is already a step forward, compared to past years when most applications were outright rejected.
If the SEC does approve one or more of these ETFs, it could have a significant impact on the cryptocurrency market.
A green light for Solana, Litecoin, or XRP ETFs could encourage more institutional investors to enter the space, potentially driving prices higher and increasing mainstream adoption of digital assets.
For now, all eyes are on the SEC’s next moves. The public comment period for these ETF filings will provide further insight into how market participants view these products.
Meanwhile, analysts will continue monitoring developments closely, with key deadlines approaching in the coming months.
