SEC Poised to Reject Solana (SOL) Spot ETFs – What About XRP?

SEC’s Stance on Cryptocurrency ETFs

The SEC has long been cautious about approving cryptocurrency ETFs, a stance that has drawn significant attention from the crypto community. Following a high-profile lawsuit with Grayscale over ETF approvals, the SEC finally approved Bitcoin ETFs in January, with Ethereum ETFs following later. Since then, multiple companies have filed applications for digital asset ETFs, including those for Solana (SOL) and XRP.

However, the SEC’s decision to reject some of the Solana ETF applications has raised questions about its approach to approving new cryptocurrency ETFs. According to Fox Business journalist Eleanor Terrett, the SEC has reportedly informed two applicants of the rejection, signaling the regulator’s reluctance to approve crypto ETFs under the current administration. Terrett added, “The consensus here, I’m told, is that the SEC won’t entertain any new crypto ETFs under the current administration.” This position is now a source of concern for XRP ETF applicants.

• Bitcoin and Ethereum ETFs: The SEC approved Bitcoin and Ethereum ETFs after a lengthy delay, but since then, applications for other cryptocurrencies like Solana and XRP have faced significant hurdles.
• Solana ETF Rejections: Two of the five applicants seeking Solana spot ETF approval have been informed of rejections, reinforcing the SEC’s cautious stance on cryptocurrency ETFs.

XRP ETF Applications in Limbo

The SEC’s delay in approving cryptocurrency ETFs has been particularly frustrating for XRP supporters. Several firms have filed applications for XRP ETFs, hoping to bring the cryptocurrency into the mainstream investment sphere. However, with the SEC’s rejection of Solana ETFs, XRP ETF applicants find themselves in a precarious position.

Some analysts believe that the SEC may approve one or more of the pending ETF applications, but as Terrett pointed out, the agency is unlikely to approve a single application without approving others. “The SEC won’t approve just one or a couple and not the others,” she said, referring to the simultaneous launch of Bitcoin ETFs. As a result, XRP ETF applications may face further delays or rejections under the current regulatory climate.

• XRP Supporters’ Frustration: Many in the cryptocurrency community are frustrated with the SEC’s reluctance to approve XRP ETFs, especially after the success of Bitcoin and Ethereum ETFs.
• Possible Approval Delays: With the SEC’s ongoing hesitation, the approval of XRP ETFs could be delayed indefinitely.

Transition in SEC Leadership

In a significant development, SEC Chair Gary Gensler recently announced his intention to step down from his role as SEC Chairman, effective January 20, 2025. His departure coincides with the inauguration of President-elect Donald Trump, who has nominated former SEC Commissioner Paul Atkins as Gensler’s successor. Atkins is known for his more market-friendly stance and is seen as a potential advocate for more lenient cryptocurrency regulations.

This transition in SEC leadership has sparked hope within the cryptocurrency community. Some industry observers believe that the change in leadership could lead to a more favorable regulatory environment for cryptocurrency ETFs, including XRP. One user expressed optimism, saying, “That’s fine. We can wait 6 weeks,” reflecting the general sentiment that under new leadership, ETF approval may become more attainable.

• Gary Gensler’s Departure: Gensler’s resignation in 2025 marks a turning point for the SEC and the cryptocurrency industry.
• Paul Atkins as Successor: Atkins, who has a more market-friendly stance, is expected to be more open to approving crypto-related financial products like ETFs.

Conclusion: What’s Next for Cryptocurrency ETFs?

While the SEC’s rejection of Solana ETF applications may be a temporary setback for the cryptocurrency industry, the impending leadership change offers hope for a more favorable regulatory approach. XRP supporters are especially hopeful that the new SEC leadership will approve their long-awaited ETF applications. As the SEC continues to evaluate digital asset ETFs, the broader crypto community will be closely watching for any signs of change in the agency’s stance on cryptocurrency-related financial products.