Solana Spot ETF’s Review Stuck In Limbo? US Government Shutdown Puts Progress On Hold

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The race for crypto ETFs, especially the Solana Spot Exchange-Traded Funds (ETFs), remains a significant and crucial discussion among crypto enthusiasts in the sector. While many analysts believe that approval of the funds could spark a new wave of bullish action in the market, the products continue to face several regulatory roadblocks.

Crypto And Solana ETFs Face Regulatory Freeze

As the crypto market awaits approval of the Solana and crypto Spot ETFs, the funds have experienced yet another roadblock, which is likely to impact their approval process. Specifically, this new setback on one of the most closely watched developments in the digital asset space was triggered by the ongoing United States government shutdown.

According to the report from SolanaFloor on the social media platform X, the US government shutdown has effectively halted the SEC’s progress on reviewing Solana and other spot crypto ETF applications. With federal operations slowing down, the US SEC’s capacity to process and accept new applications has been disrupted. 

SolanaFloor highlighted that the US SEC has currently paused its review of the S-1 filings, which is vital in the approval process of the funds. Such a development will ultimately delay crucial decisions regarding the Solana and other impending crypto spot ETFs, including Dogecoin and XRP. 

Sharing an update on the filings, Greg Xethalis, the General Counsel (GC) at Multicoin Capital, stated that the funds still require registration under the 1933 and 1934 Acts, even if 19b-4 approvals were managed under the Generic Listing Standards (GLS). Xethalis highlighted in his latest post on X that the 19b4 is not the only process, but the one that was used to block these products by previous commissioners.

In the meantime, issuers such as Bitwise Invest and Grayscale have pulled back the delayed amendments. This move implies that the delayed amendments might technically take effect after 20 days.

However, listings also need exchange clearance and Form 8-A filings. When the government reopens or exchanges proceed on their own, a number of SOL and Litecoin ETPs will be prepared for launch, but this does not guarantee that the funds will be approved.

SOL At The Top Of ETF Expectations

Given the notable success of the Bitcoin and Ethereum spot ETFs, large asset management firms are heavily exploring other major crypto assets. While the US government is set to reopen in the next week, more than 90 crypto ETFs are currently awaiting approval from the US SEC. 

Data from Erving shows that Solana and XRP are at the top of the list for the next spot ETFs. This demonstrates their position as a leader in the sector and underscores the heightened conviction of retail and institutional investors toward the tokens. When these tokens secure an approval for a spot ETF, it is likely to shape the next phase of institutional adoption in the crypto markets.

Featured image from Adobe Stock, chart from Tradingview.com

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