Solana News Today: Jito Labs Petitions SEC for Solana LSTs in ETPs

Jito Labs has spearheaded a petition to the U.S. Securities and Exchange Commission (SEC) to authorize the inclusion of Solana liquid staking tokens (LSTs) in exchange-traded products (ETPs) and potentially ETFs. The petition, submitted alongside Bitwise, Multicoin, VanEck, and the Solana Institute, emphasizes the benefits of LSTs in enhancing liquidity, reducing risk, and enabling passive income generation for investors [1]. This move signals a new phase in the integration of blockchain-based financial instruments into traditional markets.

The petition specifically targets eight products that filed S-1 forms with the SEC on June 13, 2025, and seeks regulatory clarity to allow LSTs to be used in-kind as part of ETP offerings. LSTs represent a form of liquid staking that allows token holders to earn staking rewards while maintaining tradability, differing from conventional staking by issuing a new token as a derivative [2]. Jito Labs and its partners argue that LSTs are capital-efficient and could offer a more robust and secure mechanism for institutional and retail investors.

The push for LST inclusion comes amid growing interest in Solana-based financial products. As of now, the total value staked in Solana LSTs exceeds $7.8 billion, with JitoSOL being the leading token issued by a validator. These tokens are frequently used in DeFi protocols and have varying price discovery mechanisms, often trading at a premium to the underlying SOL token. However, volatility and slashing risks—where underperforming validators can lose their tokens—are notable concerns that the SEC must address [1].

The petition underscores that staking practices were largely omitted in early ETF and ETP filings due to technical complexities and regulatory uncertainties. As Ethereum and now Solana gain traction in the ETP space, staking has become a key operational and liquidity-enhancing mechanism. The group is urging the SEC to apply consistent standards to LSTs across different blockchains and clarify the regulatory treatment of staking rewards and in-kind compensation [3].

By seeking approval for LSTs, Jito Labs and its partners aim to facilitate broader adoption of Solana-based financial products and establish a precedent for how similar innovations are regulated. The initiative also reflects a strategic effort to align with evolving institutional demand for blockchain-native instruments that offer both security and efficiency.

[1] Jito Labs leads SEC petition to approve Solana liquid staking tokens for ETPs (https://www.mitrade.com/insights/news/live-news/article-3-1002782-20250801)

[2] Jito Labs leads SEC petition to approve Solana liquid staking tokens for ETPs (https://coinmarketcap.com/community/articles/688bb2996531557e4d998ce8/)

[3] SEC Urged to Approve Liquid Staking Tokens for Solana ETFs (https://www.binance.com/en/square/news/all)