The Chicago Board Options Exchange (CBOE) has filed applications to list two Solana exchange-traded funds (ETFs) from VanEck and 21Shares. Analysts now believe the approval deadline for these ETFs will probably be set for mid-March next year. However, the outcome may be influenced by the U.S. presidential election. Meanwhile, celebrities promoting Solana-based meme coins could face potential SEC scrutiny for securities law violations.
Mid-March Deadline Set for Solana ETF Approval
The Chicago Board Options Exchange (CBOE) has recently filed applications to list two Solana exchange-traded funds (ETFs) proposed by VanEck and 21Shares. These filings were submitted on July 8, and include Form 19b-4 applications for the 21Shares Core Solana ETF and the VanEck Solana Trust.
The CBOE compared the prospective Solana funds to spot Bitcoin and Ether ETFs, which were approved by the SEC earlier this year. According to the CBOE, Solana’s decentralization, throughput, and speed make it resistant to price manipulation, thereby protecting investors. The filings also point out that Solana, like Bitcoin and Ethereum, has mechanisms to prevent fraudulent and manipulative activities, thus justifying the exemption from the usual surveillance sharing agreement requirements.
ETF analyst Nate Geraci stated that the SEC will have 240 days to decide on the approval of these ETFs once the filings are acknowledged. This means the final decision deadline will be around mid-March next year.
However, the approval of Solana ETFs may depend on the outcome of the upcoming U.S. presidential election. Senior Bloomberg ETF analyst Eric Balchunas pointed out that the election results could have a big influence on the SEC's decision. If President Biden is re-elected, the Solana ETFs might face rejection, whereas a Trump victory could increase their chances of approval.
In addition to the political considerations, a June 27 research report by crypto market maker GSR Markets suggested that the launch of Solana ETFs in the United States could potentially lead to an increase in the price of SOL, possibly by a factor of nine.
SEC May Target Celebrity Solana Meme Coins
Despite the excitement surrounding Solana ETFs, Solana meme coins might be facing some trouble soon. Celebrities who recently created and promoted meme coins on the Solana blockchain could be in violation of securities laws and could attract the scrutiny of the SEC, according to legal experts.
Public figures like Caitlyn Jenner, Iggy Azalea, and Jason Derulo have launched and promoted crypto tokens using their likenesses since late May. In a recent interview, David Chung, founding director of Creo Legal, stated that promoting meme coins could quickly draw the SEC's attention. He specifically highlighted Jenner as a prime target for potential legal action for selling unregistered securities without the proper license.
Liam Hennessy, a partner at law firm Clyde & Co, agrees with this, and recalls previous incidents where celebrities faced penalties for unlawfully promoting cryptocurrencies without sharing their commissions. This was the case with Kim Kardashian's $1.26 million settlement over EthereumMax.
The SEC has broadly classified almost all crypto tokens as securities, implying that these celebrity tokens might require registration with the regulator. If these celebrities do not comply, it could result in large penalties for unlicensed activity, though the primary concern might be with the token issuers rather than the celebrities themselves.
These tokens were launched on the Solana-based meme coin platform pump.fun. Jenner and Derulo attributed their token creation to alleged scammer Sahil Arora. However, Jenner and Derulo have publicly spoken against Arora, accusing him of scamming them, although Arora claimed that Derulo's accusations were orchestrated.
Crypto analytics firm Bubblemaps believes there was some insider activity around the launches of these tokens, as some wallets profited millions of dollars.
Legal experts like Chung warn that distancing from the token release does not absolve creators of liability. If a celebrity is found to have coordinated with Arora and staged a public fallout, this would not shield them legally.
Despite being down quite a bit from their peak prices, these tokens could still pose risks of legal action from investors who suffer losses. These investors might form class actions, similar to previous lawsuits against celebrities for promoting crypto.
The SEC has not commented on the issue at all, and the celebrities involved have mostly remained silent or unresponsive to questions.
Lionel Messi Promotes Meme Coin
International soccer legend Lionel Messi has also joined the meme trend by promoting a Solana-based meme coin called WaterCoin (WATER) through his Instagram Stories. WaterCoin wants to raise awareness for water-related issues and plans to become an ecological coin in the future.
The project’s roadmap outlines four stages, from the initial presale to becoming a charity-focused environmental currency. However, the roadmap does not really include any detailed plans for achieving these goals, and the token's price movements suggest that it could even be a "pump and dump" scheme.
Investing in meme coins carries a lot of risk due to their volatile price movements which are often unconnected to any underlying utility. Despite this, traders still engage with meme coins, hoping for large profits.
Blockchain technologies offer some innovative solutions for environmental protection through transparency and community empowerment. For example, in 2022, Samsung used Veritree’s blockchain technology to track reforestation efforts in Madagascar, with the goal to capture 1 billion pounds of carbon over 25 years. The environmental impact of Bitcoin has also led to a focus on more sustainable mining practices, using renewable energy sources like solar, geothermal, and nuclear power.
Solana Shines in Africa
While the jury is still out on Solana meme coins, Solana itself has had a positive impact. Oladotun Wilfred Akangbe, the chief marketing officer of Flincap — a platform for African over-the-counter crypto exchanges — recently pointed out the remarkable growth and maturity of the cryptocurrency industry, including Solana’s resilience and community efforts in Africa.
Akangbe shared that the industry is steadily maturing, showing its ability to withstand challenges that would have previously triggered a market downturn. Despite some regulatory issues, like the legal troubles surrounding Binance and its founder, Changpeng Zhao, who pled guilty in November of 2023 to violating United States money laundering laws, the industry continues to grow.
Akangbe pointed out that the strength and adoption of technology heavily depend on the vigor of its community. The continuous focus of crypto projects on solving community problems, especially in remittances and international payments, indicates positive year-on-year growth. He stated, “With the kind of communities built around several crypto projects, we’re closer to mainstream adoption than ever before.” This sentiment follows recent Solana Allstars Nigeria community meetups.
The Solana Foundation initiated several activities, like meetups, hackathons, and educational workshops, effectively onboarding many Africans into the Solana ecosystem. These initiatives boost community engagement and drive the practical adoption of blockchain technology.
Various decentralized groups worldwide promote Solana, with the Solana Allstars team in Nigeria emerging as one of the most active Web3 adoption groups. Akangbe believes that these efforts shift user focus from price movements to the real-world utility of Solana’s projects.
