SEC Clears the Way for XRP, Solana, and Litecoin ETFs

The SEC has made its first public appearance on a slew of new crypto ETFs, including Solana and Litecoin. Meanwhile, Cboe has aggressively filed four 19b-4 filings for XRP ETFs with the SEC.

On February 6, the U.S. Securities and Exchange Commission (SEC) officially acknowledged Grayscale’s 19b-4 amendment for the Solana spot ETF, marking the first time a digital asset previously considered a security has been accepted for review by the SEC.
Previously, under Chairman Gary Gensler, the SEC repeatedly rejected Solana ETF applications on the grounds that they did not meet the classification criteria for “commodity trust shares” – a type of fund that is typically only used for assets like gold or silver.
However, things changed when President Donald Trump appointed Mark Uyeda as acting SEC Chairman, who has a more open stance towards the crypto industry, leaving the door open for approval of Solana ETFs wider than ever.

Bloomberg ETF analyst Eric Balchunas said:

“The change in leadership at the SEC has really opened a new chapter, even if the initial steps seem tentative.”
However, the road to approval of Solana ETFs is still thorny as the SEC has not yet closed its lawsuits against Binance and Coinbase, in which the agency maintains that Solana is an unregistered security.

In addition, Solana does not yet have a futures ETF – a factor considered a prerequisite before paving the way for spot ETFs. Under the usual roadmap, an asset class needs to have an approved futures ETF and stable trading for a sufficient period of time before the SEC considers approving a spot ETF. This means that, even if a Solana futures ETF gets the green light, the road to a spot ETF is still very far away.
Meanwhile, the odds of SEC approval of a Solana ETF in 2025 on Polymarket predictions market is currently up to 85%, reflecting positive sentiment among users about the prospect of launching this ETF despite many legal hurdles to overcome.

Experts at JPMorgan predict that if approved, Solana ETF could attract from 3 to 6 billion USD in capital inflows in the first year.
Besides Grayscale, a series of "big guys" such as VanEck, 21Shares, Canary, Bitwise, Osprey Funds and Rex Shares have also quickly joined the race, submitting applications for Solana ETF licensing to the SEC recently.

SOL price is currently fluctuating around 193 USD, recording a decrease of 3.7% in the past 24 hours.

Also on February 6, the SEC officially recognized Grayscale's Litecoin ETF application, opening up the opportunity for this cryptocurrency to become the next name to be licensed after Bitcoin and Ethereum.

Experts say Litecoin has a big advantage in the ETF race thanks to its similar technology to Bitcoin, long history of operation and strong position in the crypto market.

In addition, Canary Capital investment fund has also filed an S-1 for a Litecoin ETF. According to many sources, the SEC is actively reviewing this application, increasing expectations for approval in the near future.

Cboe continues to promote XRP ETF

On the same day, the Chicago Stock Exchange (Cboe) officially submitted a 19b-4 application to the SEC to request permission to list and trade four XRP ETFs from leading asset managers including WisdomTree, Bitwise, 21Shares and Canary Capital.

Experts consider this an ambitious move, showing the growing confidence of financial institutions in wanting to bring XRP to the traditional stock market. While there is no guarantee that the SEC will greenlight these filings, the decision to file 19b-4s for the XRP ETFs suggests that the companies are more comfortable with the “new” SEC under Chairman Mark Uyeda.

The filings for the XRP ETFs all cite the landmark July 2023 Ripple-SEC ruling, which ruled that XRP transactions on the secondary market do not constitute investment contracts, meaning they are not considered securities.

However, the legal battle that has lasted more than four years shows no signs of ending. The SEC is currently appealing to the Court of Appeals for the Federal Circuit to overturn the court’s decision. If the SEC wins this appeal, the XRP ETFs could be taken off the table.

Another major hurdle the SEC could use to reject the XRP ETF is the lack of a futures market on CME. Financial lawyer Scott Johnsson commented:

“The lack of CME futures is a major weakness for the XRP ETF. This is one of the reasons the SEC has delayed decisions on other ETFs in the past.”

XRP price recorded a decrease of more than 3.5% in the past 24 hours and is currently trading at around $2.34.