JPMorgan Chase’s Managing Director and Global Market Strategist, Nikolaos Panigirtzoglou, has expressed doubt over the success of Solana and other asset ETFs. In a statement to The Block on May 27th, Panigirtzoglou stated that the recent approval of a spot Ethereum ETF by the U.S. Securities and Exchange Commission (SEC) has been “tightrope walking.” Despite obtaining approval, the SEC’s classification of ETH as a security or commodity remains unclear.
According to Panigirtzoglou, this lack of clarity raises doubts about other assets: “We believe the SEC will not further approve Solana or other token ETFs.” He further added, “The SEC believes that tokens other than BTC and ETH should be classified as securities, which is a stronger stance than its position on ETH itself.”
Panigirtzoglou acknowledged that U.S. lawmakers could enact legislation to classify most crypto assets as non-securities, but he stated that such legislation does not currently exist. However, some commentators are more optimistic about the chances of a Solana ETF approval.
Crypto asset investor Brian Kelly believes that the approval of an ETH ETF could increase the likelihood of a Solana ETF approval, but he also acknowledges that classifying SOL as a security is a “potential issue.” Bloomberg ETF analyst James Seyffart expects Solana ETFs to be successful within a few years due to legislation like FIT21, which distinguishes between securities and futures markets. Seyffart also sees Solana’s security status as a potential challenge.
A report from Polymarket suggests that there is a 13% chance of the SEC approving a Solana ETF by the end of 2024. Regardless of how the situation unfolds, the SEC has previously classified Solana and other tokens as securities in several enforcement cases.
In the case against Coinbase, the SEC stated that Solana, among many other tokens, was offered and sold as investment contracts and securities, both in the past and present. The regulatory agency emphasized that the $23 million worth of Simple Agreement for Future Tokens (SAFTs) from Solana Labs is an example of a security 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.