The U.S. Securities and Exchange Commission (SEC) has reportedly asked potential Solana ETF issuers to amend their filings quickly. According to multiple sources, the agency expects revised S-1 Forms to be submitted within a week of notice. If submitted promptly, the SEC could issue a decision on the applications within three to five weeks.
This development signals a potential shift in the regulator’s posture toward altcoin-backed financial products. Discussions included clarifications on in-kind redemptions and fund participation in Solana staking. SEC staff reportedly indicated they may permit limited staking within the ETF structure, subject to proper disclosures.
The timeline has shortened considerably, suggesting a fast-track process is underway. Previously, analysts did not expect Solana ETF decisions before October. Now, approval could come as early as July, provided issuers meet all requested conditions.
SEC May Approve Solana ETFs Early
The SEC had taken a cautious approach to crypto ETFs, typically using the full review period. On May 20, Bloomberg analyst James Seyffart noted the agency often takes all available time to process 19b-4 filings. However, conditions appear to have changed since several firms filed for products with staking components.
Source: X
By June 10, analysts highlighted that ETFs tracking broader crypto indexes, including Solana, might receive approval earlier than expected. REX Shares’ recent filings using the C-Corp structure reportedly influenced the SEC’s pace. The C-Corp format includes tighter deadlines, accelerating the regulator’s review timeline.
Source: X
Moreover, the SEC requested detailed explanations about redemption procedures and how Solana staking would be integrated into the funds. Two sources confirmed that the agency showed openness to staking, which could offer yield within the ETF. That flexibility may make the proposed Solana ETFs more attractive to institutional investors.
Competitive Slate Lines Up
A growing list of asset managers has submitted applications for Solana ETF products. These include Fidelity, VanEck, Grayscale, Franklin Templeton, Bitwise, Canary Capital, and 21Shares. Each firm aims to gain early mover advantage in the expanding crypto ETF market.
Grayscale seeks to convert its existing Solana Trust into an ETF, following the same strategy used for Bitcoin and Ethereum. That application was delayed on May 13, while Franklin Templeton faced a similar delay on April 30. Meanwhile, Fidelity and VanEck saw postponements on May 19.
On June 6, VanEck, 21Shares, and Canary Capital urged the SEC to restore first-to-file privileges. The letter emphasized the need for procedural fairness and argued that early filers should retain priority. The filing specifically referenced Solana ETFs, underlining the stakes involved in the current review process.
SOL ETFs May Include Staking Feature
The SEC has not yet approved staking within any crypto ETF, but this could change with the Solana ETF. Issuers have outlined mechanisms that could allow the fund to earn staking rewards. The agency asked them to define operational and custodial safeguards around those functions clearly.
Allowing limited staking could position Solana ETFs as yield-generating products. This would differentiate them from traditional crypto ETFs, which only track price. Institutional demand for passive income strategies could drive strong inflows into these funds.
However, the SEC remains cautious about risks, particularly regarding how staking interacts with liquidity and fund redemptions. Issuers must ensure compliance with existing fund rules and provide clear disclosure.
FAQs
What is a Solana ETF?
A Solana ETF is an exchange-traded fund that aims to track the price or performance of the Solana cryptocurrency.
Why is the SEC fast-tracking Solana ETF approvals?
The SEC is responding to new filings using a faster C-Corp format and is reviewing staking proposals from applicants.
Which companies have applied for Solana ETFs?
Firms like Fidelity, VanEck, Grayscale, Bitwise, 21Shares, Canary Capital, and Franklin Templeton have submitted applications.
Will Solana ETFs include staking?
Applicants proposed limited staking, and the SEC has requested clarity on procedures and safeguards for such features.
When could Solana ETFs be approved?
If revised filings are submitted this week, decisions may come within three to five weeks, possibly by early July.
Glossary of Key Terms
Solana ETF: A fund traded on a stock exchange that tracks the performance of Solana cryptocurrency.
S-1 Form: A regulatory filing submitted to the SEC for the registration of new securities.
Staking: The process of holding crypto in a wallet to support network operations in return for rewards.
C-Corp Format: A corporate structure offering tax and reporting advantages for ETF filings.
In-Kind Redemptions: A method allowing investors to exchange ETF shares for underlying assets instead of cash.
References:
X
X
Cryptonews
Cryptobriefing
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