Brazil Regulator CVM Approves Second Solana ETF, US Lags Behind

Highlights:

• Hashdex becomes the second to receive CVM approval for a Solana ETF.
• Hashdex’s Solana ETF, managed in partnership with BTG Pactual, is in the pre-operational phase.
• US Solana ETF faces setbacks as CBOE withdraws filings and SEC approval remains uncertain.

The Brazilian Securities and Exchange Commission (CVM) has approved a second Solana (SOL) spot exchange-traded fund (ETF), marking another significant step in Brazil’s growing embrace of cryptocurrency investments. The CVM disclosed this in its central database on August 20.

The newly approved ETF called the “Hashdex Nasdaq Solana Index Fund,” is in the pre-operational phase and will be managed by Hashdex, a Brazilian asset manager known for its innovative approach to crypto investment products. With over $962 million in assets under management, Hashdex has become a key player in the ETF market on Brazil’s B3 stock exchange. According to the regulator, the SOL ETF will be launched in partnership with BTG Pactual, a leading local investment bank.

🚨BREAKING: 🇧🇷Brazil Approves Second $SOL ETF!

Approval: Brazil's Securities and Exchange Commission (CVM) has approved a second Solana ETF.

Launch Partners: The ETF will be launched by Brazil-based asset manager Hashdex, with over $962 million AUM, in partnership with local… pic.twitter.com/VslXc1eDuA

— Kyle Chassé (@kyle_chasse) August 21, 2024

Hashdex Joins Solana ETF Market as Demand Grows

Brazilian asset manager Hashdex is the second to receive CVM approval for a Solana spot ETF. On Aug. 8, 2024, the CVM made a significant move by approving the first-ever SOL spot ETF offered by another major Brazilian asset manager, QR Asset.

The rapid succession of these approvals highlights Brazil’s growing demand for cryptocurrency investment options. The Solana blockchain, known for its scalability and efficiency in decentralized finance (DeFi), has garnered significant attention.

Hashdex’s entry into the Solana ETF market follows its established presence in digital assets. The firm has gained recognition with successful ETF launches, including products based on the Nasdaq Crypto Index and ETFs focused on Bitcoin and Ethereum.

The Brazilian stock exchange B3 also offers ETFs and ETF receipts linked to crypto assets. In March, it began offering BlackRock’s iShares Bitcoin Trust ETF (IBIT). Brazil also launched Bitcoin futures trading in April and plans to expand its offerings to meet the rising demand for derivatives that hedge against crypto price fluctuations.

No Progress for US Solana ETF as CBOE Withdraws Filings

While Brazilian asset managers receive regulatory support for launching Solana spot ETFs, their US counterparts continue to face obstacles. In June, VanEck and 21Shares filed for a Solana-based spot ETF in the US. However, the chances of SEC approval diminished when the Chicago Board Options Exchange (CBOE) removed the 19b-4 filings from its website. The regulator’s concerns reportedly focus on Solana’s classification as a security, a contentious issue affecting the cryptocurrency industry.

Meanwhile, Matthew Sigel, Head of Digital Asset Research at VanEck, asserted that the approval process for their Solana spot ETF is still ongoing. Bloomberg analyst Eric Balchunas commented that the SEC never posted the asset managers’ filings on its website, indicating a reluctance to advance the application. He described the likelihood of approval as having “a snowball’s chance in hell.” 

Nice flow chart showing how the Solana ETF filings never made it past Step 2 (the SEC failed to ack them) = DOA. So the exchanges withdrew 19b-4s altho the issuers' S-1s are still active. A snowball's chance in hell of approval unless there's change in leadership via @JSeyff pic.twitter.com/e8BNKT33KH

— Eric Balchunas (@EricBalchunas) August 20, 2024

He anticipated that a change in leadership might be necessary for future approval. The SEC, under Gary Gensler, has pursued enforcement actions against many crypto projects and startups. According to Balchunas, there is a “near-zero chance” of Solana ETF approval in 2024.