SEC Invokes Rule 18f-4 to Block 3x Solana and XRP ETF Proposals

• The Block: The SEC issued warning letters to ProShares, Direxion, and others, halting the launch of 3x and 5x leveraged ETFs.
• The Rule: Regulators cited Rule 18f-4, forcing a strict 200% leverage cap on volatile assets like Bitcoin, Solana, and Strategy (MSTR).
• The Retreat: ProShares immediately withdrew filings for leveraged crypto products, signaling the end of the “hyper-leverage” experiment.

According to reports, the US Securities and Exchange Commission (SEC) has taken action against three firms, including Direxion, ProShares, and GraniteShares, for violating leverage conditions. 

The SEC sent identical warning letters to the companies, effectively blocking the introduction of ETF products offering 3x-5x leverage.

Related: Vanguard Capitulates: $11 Trillion Manager Opens Door to Crypto ETFs

The SEC’s ETF Leverage Cap is 200%

It is worth noting that …

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