Morgan Stanley’s Managing Director and Global Market Strategist, Nikolaos Panigirtzoglou, has expressed his skepticism regarding the approval 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) was a “tight decision.” Despite the approval, the SEC’s classification of whether ETH is a security or a 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 added, “The SEC’s stance on tokens other than BTC and ETH being classified as securities is even more firm than its position on ETH itself.”
While Panigirtzoglou acknowledges that U.S. legislators could pass legislation classifying most crypto assets as non-securities, he notes that such legislation does not currently exist. However, some commentators are more optimistic about the chances of a Solana ETF being approved.
Crypto asset investor Brian Kelly believes that the approval of an ETH ETF could increase the likelihood of a Solana ETF being approved, but he also acknowledges that the classification of SOL as a security is a “potential issue.” Bloomberg ETF analyst James Seyffart expects that with legislation like FIT21 categorizing the securities and futures market, a Solana ETF could be successful within a few years. Seyffart also sees Solana’s security status as a potential challenge.
A report by Polymarket suggests that there is a 13% chance of the SEC approving a Solana ETF by the end of 2024. Regardless of the future approach, the SEC has previously classified Solana and other tokens as securities in multiple enforcement cases.
In the case against Coinbase, the SEC stated that Solana was one of the many tokens offered as investment contracts and securities, both in the past and present sales. The regulatory agency emphasized that the $23 million worth of Simple Agreements for Future Tokens (SAFTs) issued by Solana Labs were examples of securities offerings and sales. In cases against Binance and Kraken, the SEC also referred to Solana as a security.
However, the SEC has not initiated direct enforcement actions against Solana Labs or related parties.
