As many predicted, after the U.S. approved spot exchange-traded funds (ETFs) of [[Ethereum (ETH)]], its price experienced an immediate decline, mirroring [[Bitcoin (BTC)]]'s market reaction when its recent EFT was approved. Despite widespread anticipation of a bullish surge, ETH dipped 4% right after the historic SEC decision. Initially, rumors of approval led to a brief 9% spike for Ethereum, followed by a 6% drop over 24 hours to $3,701. The pattern eerily resembled Bitcoin's trajectory, with an initial 6% plunge and a subsequent 12% weekly drop after its ETF approval in January. This "buy the rumor, sell the news" phenomenon left investors and analysts scratching their heads. While many still believe in the long-term bullish potential of ETH, especially considering Bitcoin's eventual recovery and new all-time high, the immediate market sentiment remains cautious. Bitcoin also experienced a 3.5% decline over 24 hours, reflecting the broader market's uncertainty and take profits. Although [[Standard Chartered]] had predicted soaring prices for both ETH and BTC post-ETF approval, the current market volatility suggests a bumpy road ahead, especially for altcoins seeking ETF approval in the near future. Is Solana Next? The SEC's green light for spot Ethereum ETFs has fueled speculation about which cryptocurrency will be next in line. Solana has emerged as a potential candidate, merely for its market dominance in terms of market-cap, but regulatory hurdles could significantly delay its ETF approval, along with that of other altcoins. One major obstacle is the [[Securities and Exchange Commission (SEC)]]'s classification of several major cryptocurrencies, including Solana, as "unregistered securities." This stance stems from lawsuits against exchanges like Coinbase and Kraken. Unlike Bitcoin and Ethereum, which are often viewed as commodities, this classification creates a major roadblock for Solana and other altcoins seeking ETF approval. Another challenge is the lack of futures markets regulated by the [[Commodity Futures Trading Commission (CFTC)]] for [[Solana (SOL)]] and other altcoins. Historically, both Bitcoin and Ethereum ETFs were preceded by the availability of such futures products, allowing for correlation analysis between futures and spot prices. Without this precedent, the SEC is unlikely to approve spot ETFs for these altcoins. A bit of hope for the crypto community lies in the [[Financial Innovation and Technology for the 21st Century Act (FIT21)]], recently passed by the House of Representatives. This bill could potentially grant the CFTC more authority over crypto spot markets, potentially easing the path for spot crypto ETFs. However, FIT21 faces an uncertain future in the Senate, and even if passed, its impact on the SEC's stance remains unclear. Considering these factors, the market remains skeptical, with [[Polymarket]] predicting only an 11% chance of a Solana ETF in 2024. Even if Solana can overcome the "unregistered security" hurdle, the absence of a futures market and the complex legislative landscape could significantly delay its ETF approval, along with that of other altcoins. The recent passage of the Financial Innovation and Technology for the 21st Century Act (FIT21) by the [[US House of Representatives]] has ignited a heated debate within the crypto community. While some see it as a step towards much-needed regulatory clarity, others fear it could grant excessive power to the Commodity Futures Trading Commission (CFTC), potentially stifling innovation. On the positive side, FIT21 introduces a decentralization test to classify certain assets as commodities, potentially shielding them from the SEC's enforcement actions. This could weed out projects that are "decentralized in name only," promoting genuine decentralization within the industry. Some believe the bill could also attract legitimate blockchain projects to the US, fostering a healthier crypto ecosystem. However, critics argue that FIT21 expands the CFTC's regulatory authority, raising concerns about potential overreach. The CFTC has a history of questionable enforcement actions in the crypto space, and some worry about the creation of a "dual regulatory regime" where both the SEC and CFTC wield significant control over the industry. The crypto community remains divided on the issue, with some celebrating the bill as a sign of confidence in the industry and others cautioning against supporting flawed legislation for the sake of optics. The future of FIT21 hangs in the balance, as it still needs Senate approval to become law. Meanwhile, on the other side of the world, Hong Kong-based cryptocurrency exchange Gate.HK has ceased operations, unable to secure the mandatory license required by the [[Hong Kong Securities and Futures Commission (SFC)]] for all crypto exchanges operating in the region. The SFC's mandate, effective June 1, requires all exchanges to obtain a license or halt services. Despite initially applying for the license in February, Gate.HK withdrew its application in May, citing the need for a substantial platform overhaul to comply with regulations. As a result, Gate.HK stopped acquiring new users and marketing efforts on May 23, limiting existing users to fund withdrawals until August 28. The exchange aims to relaunch in [[Hong Kong]] after restructuring its platform to meet regulatory requirements, including [[Anti-Money Laundering and Counter-Terrorist Financing]] measures. Adding to the regulatory woes of the region, OKX has announced its decision to withdraw its [[VASP]] license application in Hong Kong. As a result, OKX will cease to provide centralized virtual asset trading services to Hong Kong residents by May 31, 2024. However, the exchange assures customers that their funds remain safe, and withdrawal services will not be affected. After May 31, 2024, customers will only be able to withdraw their assets. [[OKX]] has clarified that its Web3 (self-hosted wallet) services are not affected by this decision and will remain available to Hong Kong users. Before Gate.HK, three other exchanges – [[Huobi]] HK, [[QuanXLab]], and [[IBTCEX]] – also withdrew their license applications. The SFC is reportedly considering allowing spot Ether exchange-traded fund (ETF) issuers to incorporate an ETH staking option, generating passive income. While no timeline has been set for implementation, this move could signal a more accommodating regulatory environment for some aspects of the crypto industry in Hong Kong. **Disclaimer:** The information provided in this article should not be considered financial advice. The cryptocurrency market remains dynamic and carries risks. It's essential to conduct your own thorough research and consult with qualified professionals before making any investment decisions.