The US Securities and Exchange Commission (SEC) under Chair Gary Gensler is reportedly set to deliver a blow to the crypto industry by rejecting two spot Solana (SOL) exchange-traded funds (ETF) applications. This move, described as Gensler’s “parting gift” to the industry by Bloomberg ETF senior analyst Eric Balchunas, marks a significant development in the regulatory landscape of cryptocurrencies.
Gensler’s Parting Gift
According to sources at two Solana ETF issuers, the SEC, under Gensler’s leadership, will not approve any new crypto-related ETF filings. Gensler is expected to step down on January 20, 2025, and Balchunas anticipates that the issuers will refile their applications once Paul Atkins assumes the role of SEC chair.
Former VanEck digital asset strategy director Gabor Gurbacs remarked on Gensler’s impending departure, suggesting that this rejection was his way of leaving his mark on the industry. Balchunas also weighed in, characterizing Gensler’s actions as a parting gift to the crypto world.
Impact on the Crypto Industry
While some view Gensler’s decisions as a deliberate stance against cryptocurrencies, Bloomberg ETF analyst James Seyffart argued that the SEC’s position on Solana ETFs was a result of the ongoing legal battles surrounding the classification of cryptocurrencies as securities. Seyffart believes that the new SEC administration will need to address these lawsuits and determine the regulatory framework for crypto assets moving forward.
Seyffart’s projections for the approval timeline of the Solana ETFs have been pushed back, with uncertainties surrounding the regulatory environment. The SEC’s recent involvement in the Binance lawsuit, as highlighted by Seyffart, adds another layer of complexity to the situation, further complicating the path to ETF approval for Solana.
Ripple’s Response
Stuart Alderoty, Ripple’s chief legal officer, criticized the SEC’s actions in the Binance case, pointing out the regulator’s persistence in pursuing legal action against crypto exchanges. Despite the impending leadership change at the SEC, the regulator’s stance on cryptocurrencies remains unchanged, causing concern within the industry about the future regulatory landscape.
As the crypto community navigates these challenging regulatory waters, the implications of Gensler’s decisions are likely to reverberate throughout the industry, shaping the future of crypto investments and exchanges.