SEC delays decision on Solana ETF applications citing market manipulation concerns

The U.S. Securities and Exchange Commission has delayed its decision on four proposed Solana exchange-traded funds, including filings from Bitwise, 21Shares, VanEck, and Canary. 

The announcement, shared on a May 19 filing, indicates that the agency will “institute proceedings” to assess whether the ETF proposals meet regulatory standards. This procedural move allows the SEC to extend the review period and open a public comment window.

The agency stressed that the institution of proceedings “does not indicate that the Commission has reached any conclusions” on the filings. Instead, the SEC says it needs more time to examine the proposals under the requirements of the Securities Exchange Act, particularly provisions related to fraud prevention and investor protection.

Among the delayed filings is the Bitwise Solana (SOL) ETF, which was first submitted in January through Cboe’s BZX Exchange. Bitwise’s fund would hold SOL directly, with prices tracked against the CME CF Solana-Dollar Reference Rate. Similarly, 21Shares, already known for its spot Bitcoin (BTC) and Ethereum (ETH) ETFs, filed its own Solana proposal earlier this year.

Despite growing demand, no altcoin ETFs linked to Solana have been authorized in the U.S. to date. The SEC’s cautious approach to growing crypto-based investment products, particularly for assets other than Bitcoin and Ethereum, is reflected in the delays.

The SEC is assessing whether the proposals comply with Exchange Act Section 6(b)(5), which requires that listed products be made to “protect investors and the public interest” and “prevent fraudulent and manipulative acts and practices,” according to the filing.

The delay also comes amid a wider regulatory bottleneck for digital asset ETFs. Several filings for additional cryptocurrency ETFs, including those for Dogecoin (DOGE) and XRP (XRP), are still being examined. James Seyffart and Eric Balchunas, Bloomberg ETF analysts, remain hopeful.

They estimate a 90% chance of approval for Solana and Litecoin ETFs by late 2025, citing favorable commodity classifications and rising institutional demand. But the future is still unclear. Investors may be left in limbo if the SEC’s request for public input causes the timeline to be further extended.