JPMorgan’s Managing Director and Global Market Strategist, Nikolaos Panigirtzoglou, has stated that the approval of Solana ETFs or other crypto assets is unlikely to succeed.
On May 27, Panigirtzoglou told The Block that the SEC’s recent decision to approve a spot Ethereum ETF “has already stretched the limits.”
Commodity or Security?
Despite the approval, it remains unclear whether the SEC considers ETH a security or a commodity.
Panigirtzoglou noted that this lack of clarity raises doubts about other assets: “We believe the SEC will not go further to approve ETFs for Solana or other tokens.”
He added, “The SEC’s stance is that, apart from BTC and ETH, all other tokens should be classified as securities, which is a stronger position than its stance on ETH itself.”
Panigirtzoglou acknowledged that U.S. lawmakers could enact legislation to classify most crypto assets as non-securities, but he noted that such legislation currently does not exist.
Optimistic Supporters of Solana ETFs
Crypto asset investor Brian Kelly believes that the approval of an ETH ETF could increase the chances of a Solana ETF being approved, though he also admitted that SOL’s classification as a security is a “potential issue.”
Bloomberg ETF analyst James Seyffart predicts that Solana ETFs could succeed within a few years as legislation like FIT21 delineates the securities and futures markets. However, Seyffart also views Solana’s security status as a potential challenge.
Polymarket reports that there is approximately a 13% chance the SEC will approve a Solana ETF by the end of 2024.
Regardless of future developments, the SEC has previously classified Solana and other tokens as securities in several enforcement cases.
In its lawsuit against Coinbase, the SEC stated that Solana is one of the numerous tokens offered as investment contracts and securities, both in past and present sales.
The regulatory body highlighted Solana Labs’ $23 million “Simple Agreement for Future Tokens” (SAFTs) as an example of a securities offering and sale. In cases against Binance and Kraken, the SEC also referred to Solana as a security.
However, the SEC has not directly initiated enforcement actions against Solana Labs or related parties.
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