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The crypto market experienced a surge in regulatory activity over the past 24 hours. The SEC pressed forward with plans for a spot Solana ETF, while Robinhood’s new tokenized equity products drew scrutiny in the European Union. A long-running legal battle over the sanctions on Tornado Cash has reached its conclusion.. Each development signals changing dynamics for digital asset investors, issuers, and advocates as oversight tightens worldwide.
The US Securities and Exchange Commission (SEC) has urged issuers seeking approval for spot Solana exchange-traded funds (ETFs) to refile their applications by the end of July. This move signals a fast-track approval path and comes after the REX-Osprey SOL Staking ETF received approval, marking the first US-listed Solana investment product to incorporate staking.
Applicants such as Grayscale, VanEck, 21Shares, Canary Capital, Bitwise, and Franklin Templeton have all shown interest, responding promptly to the SEC's request to amend their filings.
According to Bloomberg ETF experts, spot ETFs for Solana, Litecoin, and XRP have a 95% chance of approval this year. If approved, Solana would join Bitcoin and Ethereum as the only digital assets with spot ETF status in the US market. According to industry analysts, the SEC fast-tracked the review process, catalyzing approvals before the October 10 deadline. These developments come as the US maintains its efforts to be a prominent destination for regulated digital asset investment products.
According to industry observers, the SEC's significant shift in policy regarding staking features in ETF products may enable greater innovation in fund structure. Consequently, there are high expectations of additional approvals of crypto ETFs in 2024.
The European Union regulators have been curious about Robinhood's offering of tokenized securities, which include tokens pegged to OpenAI and SpaceX. The central bank of Lithuania, which plays the primary regulatory role in the area of Robinhood, has demanded more information about these tokenized stock instruments. OpenAI had noted concerns that the tokens sold through Robinhood do not give any substantial equity investment, casting doubt on their legality and compliance.
Robinhood recently launched a layer-2 blockchain to support over 200 US stock and ETF tokens in the European market. Despite the excitement, the platform’s private equity tokens for unlisted companies, such as OpenAI and SpaceX, have raised concerns among regulators. Galaxy Research described these as “derivatives that provide indirect exposure to the underlying asset,” a stance echoed by industry attorneys who say tokenized equity remains in a regulatory gray area.
Experts project that the worldwide tokenization market will surpass $25 billion. Although stocks account for only $188 million of that amount, analysts believe they have huge potential. Additionally, major players, such as BlackRock and Franklin Templeton, have ventured into tokenization as they seek to access markets in private credit and US Treasury bonds.
Also read: Bitcoin Price Surges Past $109K: ETFs and New Laws Push Market Higher
The US Court of Appeals for the Eleventh Circuit has dismissed Coin Center’s appeal against the US Treasury’s Office of Foreign Assets Control (OFAC) sanctions imposed on Tornado Cash. The dismissal, finalized through a joint filing, effectively ends the legal challenge brought by Coin Center over OFAC’s 2022 sanctions targeting the Tornado Cash crypto mixing service.
Coin Center’s executive director, Peter Van Valkenburgh, stated that this move marks the “official end” to their court battle. OFAC had sanctioned multiple Tornado Cash wallet addresses in 2022, leading to several lawsuits, including one from six Tornado Cash users backed by Coinbase. Tornado Cash’s native token, TORN, briefly surged after the court announcement but later retreated.
Legal issues persist for Tornado Cash developers. Roman Storm, one of the platform’s co-founders, faces criminal charges in a separate federal court case, while Alexey Pertsev has already received a prison sentence in the Netherlands.
