VanEck’s Head of Digital Assets Research, Matthew Sigel, has confirmed that the company’s Solana spot ETF proposal hinges on the outcome of the US Presidential elections. The deadline for VanEck’s application is March 2025, which falls well after the elections in November. Sigel’s response of “Can confirm” has sparked speculation regarding the company’s betting on a Donald Trump victory.
Analysts have assessed the approval odds for VanEck’s ETF proposal, stating they are “near zero” in the event of a Democrat victory that keeps Joe Biden in office. However, the odds are deemed “better but not guaranteed” if Trump emerges as the victor. This assessment is largely based on the assumption that Trump would appoint a new SEC chair to replace Gary Gensler, potentially impacting the regulatory environment for the ETF.
One significant hurdle for the Solana ETF proposal is the absence of a futures market on CME, a factor that played a crucial role in obtaining regulatory approval for spot Bitcoin and Ethereum ETFs. Grayscale has argued that surveillance sharing agreements similar to those in place for CME Bitcoin futures could suffice for monitoring spot ETFs and preventing fraudulent activities. However, the SEC’s demand for a specific surveillance sharing agreement for spot Bitcoin ETFs has raised questions about regulatory consistency across different types of Bitcoin-related ETFs.
Despite the SEC’s approval of spot ETFs for Bitcoin and Ethereum, concerns remain about the need for a CME futures market for Solana ETF approval. Sigel believes that surveillance sharing agreements with spot crypto exchanges could negate the need for CME futures, a view echoed by Bloomberg analysts. However, they caution that VanEck’s approach may only succeed with new SEC leadership or legislative action.
Legal Challenges
Past ETF filings, such as BlackRock’s spot Bitcoin ETF application in June 2023, have included surveillance-sharing agreements with exchanges like Coinbase. While initially seen as crucial, these agreements were later deemed unnecessary. The SEC’s ongoing securities lawsuits against exchanges like Coinbase and Kraken further complicate the issue of surveillance sharing agreements between exchanges and ETF issuers.
VanEck’s Solana spot ETF proposal faces several challenges, including political uncertainties, market dynamics, regulatory hurdles, and legal complexities. While the company remains optimistic about the prospects of its ETF, the road to approval is fraught with obstacles that will require strategic navigation and potentially a shift in regulatory dynamics.
Leave a Reply