Solana ETF hopes to slow down a lot: CME denies “any plans”

The Chicago Mercantile Exchange (CME) does not plan to list Solana futures, according to information disclosed by a source familiar with the matter, via the Twitter account db (@tier10k). This news is a blow to the anticipation surrounding a potential Solana Exchange Traded Fund (ETF) on the American markets.

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What this means for Spot Solana ETF hopefuls

Scott Johnsson, a seasoned financial attorney at Van Buren Capital, commented on development, highlighting the regulatory hurdles Solana faces. He clarified that while a Solana ETF does not specifically require the CME to act as a Designated Contract Market (DCM), any potential market would require a robust framework with a Custodial and Security Services Agreement (CSSA) and a sufficient liquidity. “The ETF does not need to be CME like the DCM which is listed (just one with a CSSA and liquid),” Johnsson noted.

However, the broader context of the current situation coercive measures against leading crypto exchanges like Coinbase and Binance by the United States Securities and Exchange Commission (SEC) casts a shadow over the feasibility of such an ETF. “No one will automatically certify SOL as a commodity futures contract while Coinbase/Binance enforcement actions are ongoing. Even if CME (or other DCM) self-certified, the current SEC could and would block,” Johnsson explained.

Adding to the complexity, Johnsson highlighted the need for significant change in the SEC Administration or its policies before Solana can realistically progress toward an ETF. “SOL really needs a change of administrator to have any chance for the foreseeable future. Or, the current reversal of the SEC goes much further than we expect. The first solution seems more likely,” he expressed.

The nuances of the issue have led to some confusion within the crypto community. X user Jonny Moe pointed out what the discussion was about, prompting Johnsson to clarify: “I know, but the fact is everyone is focused on this. [a futures ETF listed on the CME] as a prerequisite for a [spot] AND F.

Bloomberg ETF analyst James Seyffart agreed with Johnsson regarding the SEC’s position, adding historical perspective: “This SEC is not going to let anyone register Solana futures with the CFTC as ‘futures contracts’. futures on raw materials. They made this mistake with Bitcoin and Ethereum. I seriously doubt this admin will do it again. They would most likely react.

The SEC notably named Solana in lawsuits against Binance and Coinbase, categorizing it as a security, further complicating the asset’s regulatory landscape and its prospects for futures and spot ETF listings in the United States.

The CME leak dampens any immediate hopes for Solana’s inclusion in the futures markets and significantly dims the outlook for a spot ETF in the near term. SOL price remained relatively stable in response to the news, closely aligning with the prevailing market trend. At press time, SOL was trading at $163.83.

SOL price hovers around key support, 1-week chart | Source: SOLUSD on TradingView.com

Featured image from Euronews, chart from TradingView.com

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