- VanEck’s Solana ETF faces regulatory hurdles.
- Analysts place hopes in an obscure legal precedent.
- The disagreement with the SEC could be settled in court.
The crypto industry in the US has long struggled with regulatory uncertainty. This is especially true for altcoins like Solana, which the US securities regulator considers securities. This status has far-reaching implications, especially for potential altcoin exchange-traded funds (ETFs).
Most recently, hopeful Solana ETF issuer VanEck had made a case for the fund. Its analyst pointed to an earlier legal precedent that, in his opinion, holds the key for Solana’s classification and its ETF approval.
Legal Precedent Points to Solana as a Commodity
Another key development in the debate on Solana ETF’s legal status occurred on Tuesday, August 20. VanEck’s Head of Digital Assets Research, Matthew Sigel, uncovered a legal case with significant implications for Solana ETFs.
The key case is the 2018 Commodity Futures Trading Commission (CFTC) v. My Big Coin. In this case, the U.S. District Court ruled against the defendants, who argued that their token, My Big Coin (MBC), was not a commodity since no futures contracts referenced it. The court disagreed, noting that the CEA’s definition of a commodity extends to “all goods and articles… and all services, rights, and interests… in which contracts for future delivery are presently or in the future dealt in.”
The court further drew an analogy to natural gas, explaining that futures contracts might exist for gas delivered to specific locations. Despite this, natural gas is still treated as a commodity. This is key for Solana, which currently has no futures contracts.
How a 2018 Ruling Applies to Solana ETFs
Sigel argues that this precedent could apply to Solana, potentially classifying it as a commodity regardless of whether futures contracts exist. This classification is crucial for approving Solana ETFs, as commodities like Bitcoin and Ether have already seen success in the ETF market.
Still, other major players disagree. This includes the SEC and the Cboe U.S. Equities Exchanges, a key venue for ETFs. Recently, Cboe removed VanEck’s Solana ETF filings from its website, potentially due to the SEC’s reservations.
VanEck remains optimistic, with Sigel noting that their S-1 filing for the ETF is still active. This ongoing uncertainty highlights the challenges facing all altcoin ETFs in the U.S.
On the Flipside
- The recent approval of a Solana ETF in Brazil is another sign of a global regulatory shift that could influence the US political landscape.
- VanEck’s Sigel previously stated that Solana ETFs largely hinge on a leadership change in the SEC. However, change won’t come before the US general election.
Why This Matters
The classification of Solana as a commodity or security has key implications for all altcoins in the current regulatory landscape. If Solana is a commodity, it would be out of the jurisdiction of the SEC, which took a harsh stance towards crypto.
Read more about Solana ETFs:
Solana ETFs on Hold? Here’s Why VanEck Remains Hopeful
Read more about a new hybrid trading platform:
Trading Stocks and Gold with Crypto Now Possible on FreeBnk
