Proposals to list a spot solana ETF were submitted to the SEC last week, with the Chicago Board Options Exchange filing to list funds from VanEck and 21 Shares.

Why it matters: The CBOE is seeking to head off reasons that the regulator could cite to reject exchange-traded products (ETPs) for the third-largest cryptocurrency.

• The case made for why the SEC should approve a solana ETF, is pretty much: Y'all did it for bitcoin and ether (the latter of which are expected to start trading any day now).

💿 Between the lines: The SEC has historically decided on ETF approval based on whether the exchange had a comprehensive surveillance sharing agreement with a regulated market of "significant size" related to the underlying commodity, the filings read.

• But it has also made exceptions to get other crypto ETFs to launch.
• "The Commission has also consistently recognized, however, that this is not the exclusive means by which an ETP listing exchange can meet this statutory obligation," per CBOE filings submitted to the SEC last week to list VanEck and 21 Shares solana ETFs.

They could, for example, show that there are other ways to prevent fraud and manipulation of prices to justify approval, which is ultimately how the SEC ended up approving spot bitcoin and ether ETFs.

The difference, however, is that bitcoin and ether had a regulated futures market. Solana does not.

Zoom in: The exchange, alongside the would-be issuers for solana ETFs, argues that because it would be hard and expensive to manipulate the price of SOL, that market would be less susceptible.

• "There are a number of reasons this is the case, including that there is not inside information about revenue, earnings, corporate activities, or sources of supply," their filings read.
• Plus, "the geographically diverse and continuous nature of SOL trading render it difficult and prohibitively costly to manipulate the price of SOL.

The intrigue: The best line about the Solana ETF goes to Bloomberg Intelligence analyst James Seyffart, who told CoinDesk that VanEck's first application for one was effectively a "call option on the November election."

The bottom line: A securities lawyer tells Axios that a solana ETF approval probably won't hinge on the depth of the argument for it, but rather the composition and the philosophy of the SEC.

• SEC chair Gary Gensler's five-year term runs through 2026, however, so it might take a bit longer before a change of hearts and minds at the agency.

"You don't have to trust the government that there will only be 21 million bitcoin. It's in the code. You just have to effectively trust that Bitcoin won't be cracked, that the system is secure. I think a lot of people might, over time, gradually think that's a better form of money."

Rules only matter if they're enforced.

Why it matters: The SEC is reportedly allowing some exceptions when it comes to the now infamous guidance memo called SAB 121 that asks banks that hold digital assets to account for them a certain way.

• Turns out there is a way banks and brokerages can sidestep reporting their customers' crypto on their balance sheets, according to a Bloomberg report last week.

Between the lines: The SEC, in a statement to Axios, denied that the staff guidance creates "exceptions," but said that "certain broker dealers and custody banks" have sufficiently addressed the risks identified in SAB 121.

• "As long as their customers receive the same protection for the safeguarding of crypto assets as they do in custody arrangements, their balance sheet treatment is also the same as custody arrangements," the statement says.

The big picture: Industry groups representing crypto firms, as well those representing banks, pushed to render the rule moot, an effort that passed the House as well as the Senate, with significant participation from Democrats, but was kiboshed when President Biden vetoed it.

• Last week's attempt to override the veto was unsuccessful, as expected, but perhaps SAB 121 will lose teeth via lack of enforcement.

Our thought bubble: 👆 That was one of many possibilities crypto lawyers suggested to Axios at Consensus a month ago.

🇩🇪 Germany has finished sending the $3.4 billion worth of bitcoin it seized from criminals to exchanges. (Decrypt)

⚖️ A promoter of one of the most notorious crypto schemes of all time, BitConnect, has been convicted of providing unlicensed financial advice. (Finance Feeds)

🏦 The DAO for leading layer-2 Arbitrum voted to move $25 million of its treasury into yield-bearing real-world assets. (Unchained)

🚔 Crime watch: Thai police arrested five people who they say robbed a crypto trader and held him hostage, (The Nation Thailand) and North Koreans are gaming job listings in the industry (DL News)

The Atlantic Council updated its global crypto regulation tracker today.

Between the lines: It's tracking 60 countries with some kind of rules around the asset class.

• "Among the 60 countries we studied, cryptocurrency is legal in 33, partially banned in 17, and generally banned in 10," the tracker notes in its highlights.
• "Even for countries with partial or general bans in place, adoption rates remain high, suggesting that bans are generally ineffective."