Seven Issuers File Amended S-1 Forms for Solana ETFs with SEC

Seven issuers, including 21Shares, Bitwise, Fidelity, Franklin Templeton, Grayscale, VanEck, and Canary Capital, filed amended S-1 forms for Solana exchange-traded funds (ETFs) with the U.S. Securities and Exchange Commission (SEC) on Friday. These filings clarify language that would enable the issuers to stake their held SOL, a process that involves pledging tokens to a decentralized network in exchange for yield or financial rewards. The proposed ETFs aim to offer investors exposure to Solana by directly tracking the altcoin, with the staking component potentially allowing for higher returns to investors.
The move by the issuers comes after a report citing sources that the SEC had asked prospective Solana ETF issuers to update their S-1 filings. This development is significant as it indicates a potential shift in the regulatory stance towards decentralized finance (DeFi) and staking within ETFs. The inclusion of staking in ETFs has been a point of contention among federal regulators, who have previously delayed decisions on staking in Ethereum ETFs due to concerns over financial and security-related risks.
The updated filings come at a time when U.S. regulators and lawmakers are easing restrictions on the digital assets industry. Under the administration of U.S. President Donald Trump, the SEC and the Commodity Futures Trading Commission have shifted their approach to crypto, including dropping lawsuits against industry giants. Commissioners have also increased their engagement with crypto companies to collaborate on shaping regulatory guardrails for the industry.
The recent filings are part of a broader trend of applications for ETFs based on a wide variety of cryptocurrencies. However, the SEC has yet to approve spot ETFs based on cryptocurrencies other than Ethereum and Bitcoin. Experts expect issuers to secure the go-ahead to offer Solana ETFs in the U.S. within the next few weeks, although the approval process has been lengthy. In May, the SEC pushed back its deadline to approve or deny a swath of spot Solana ETFs.
The updated filings by Solana ETF applicants with the SEC, including clarifications on staking mechanisms, signal a potential shift in regulatory stance towards DeFi and staking within ETFs. This development could have significant implications for the cryptocurrency market, as it may pave the way for the approval of other altcoin ETFs and expand investment options for investors. However, the level of investor demand for a Solana ETF remains uncertain, and it is likely to be lower than that for Bitcoin ETFs.

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