As a researcher with experience in the crypto and financial markets, I find this development quite significant for the Solana community and potential investors. The leak from the Chicago Mercantile Exchange (CME) that they have no plans to list Solana futures is a blow to the hopes of a potential Solana Exchange Traded Fund (ETF) in the US markets.
A reliable source close to the Chicago Mercantile Exchange (CME) has disclosed that the exchange does not intend to introduce Solana futures, based on information leaked through the Twitter account db (@tier10k). This revelation significantly dampens the excitement surrounding the prospect of a Solana Exchange Traded Fund (ETF) in the US financial markets.
What This Means For The Spot Solana ETF Hopes
Scott Johnsson, an experienced finance lawyer at Van Buren Capital, spoke about the issue, highlighting the regulatory challenges Solana might encounter. He explained that although a Solana Exchange-Traded Fund (ETF) doesn’t necessitate the CME to serve as the designated contract market (DCM), any prospective market would need a solid framework comprised of a Custody and Security Services Agreement (CSSA) and sufficient liquidity for listing. “An ETF doesn’t have to be the CME as the DCM that’s listing—only one with a CSSA and adequate liquidity,” Johnsson pointed out.
The ongoing regulatory actions taken by the US Securities and Exchange Commission (SEC) against crypto exchanges such as Coinbase and Binance raise doubts about the possibility of an ETF based on Solana (SOL). Johnsson explained, “Given the current situation, no one is willing to classify SOL as commodity futures while these enforcement actions are ongoing. Even if the Chicago Mercantile Exchange (CME) or another designated contract market (DCM) were to self-certify, the SEC could still intervene and prevent it.”
Johnsson emphasized that for Solana to make substantial headway and potentially secure an ETF, there must be considerable transformation within the SEC or their regulations. He stated, “A major shift in the SEC’s administration or policies is necessary for SOL to thrive in the near term. The current scenario might not yield as much change as anticipated; however, a significant about-face appears more plausible.”
The complexities surrounding the issue caused some misunderstanding within the crypto community. User Jonny Moe highlighted the main topic of debate, which in turn prompted Johnsson to elaborate, “I understand the confusion, but the key point is that many people are fixated on this [futures ETF listed on the CME] being a necessary step for an [spot] ETF.”
As a researcher studying exchange-traded funds (ETFs) at Bloomberg, I share Johnsson’s perspective on the Securities and Exchange Commission (SEC) not allowing Solana futures registration with the Commodity Futures Trading Commission (CFTC). Based on historical precedent, I believe this SEC administration is unlikely to make the same mistake twice. Given their previous experience with Bitcoin and Ethereum, it’s reasonable to assume they would push back against such a registration.
As a researcher, I’ve observed that the Securities and Exchange Commission (SEC) has included Solana in lawsuits against Binance and Coinbase. The SEC classifies Solana as a security, adding complexity to its regulatory status and potentially impacting its eligibility for future and spot Exchange-Traded Funds (ETFs) listing in the United States.
The news of a leak from the Commodity Market Exchange (CME) dampens any quick enthusiasm for Solana’s addition to futures markets and noticeably reduces the likelihood of a spot Exchange-Traded Fund (ETF) in the imminent future. Despite this announcement, the SOL price remained relatively steady, following the general market trend. At present, one SOL is trading at $163.83.
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2024-05-30 14:41