On Friday, VanEck, an asset manager and cryptocurrency exchange-traded fund (ETF) issuer, announced a new filing for a spot Solana ETF backed by JitoSOL with the U.S. Securities and Exchange Commission (SEC). This represents a significant shift from other crypto ETFs as it will be the first fund to leverage a liquid staking token.
A New Era For Liquid Staking?
JitoSOL operates as a liquid staking token on the Solana blockchain, encompassing both staked SOL and related rewards. This design enables users to stake their SOL via the Jito Network while maintaining the liquidity essential for involvement in decentralized finance (DeFi) applications.
As a result, VanEck’s launch of a new spot Solana ETF could open up fresh avenues for investors to capitalize on the anticipated growth of the Solana ecosystem.
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This initiative follows recent regulatory guidance from the SEC concerning liquid staking activities. Under President Donald Trump’s administration, there was a focused effort to establish the United States as the leading global force in cryptocurrency.
The SEC’s recent shift in perspective aligns with this goal, aiming to clarify the regulatory environment for the broader digital asset market, marking a significant change from the approach taken under former Chair Gary Gensler.
Nine Solana ETF Applications Await SEC Green Light
In August of this year, a coalition of prominent organizations, including Jito Labs, VanEck, Bitwise, the Solana Policy Institute, and Multicoin Capital Management, jointly submitted a request to the SEC for approval of liquid staking in Solana ETF applications.
The letter underscored the operational benefits that liquid staking can offer potential Solana ETF issuers, including enhanced network security through increased staking participation, a broader range of investment choices for market participants, and possible new revenue streams for ETF managers.
With at least nine Solana ETF applications presently awaiting SEC approval, it’s evident that interest in this sector is growing. Notable progress towards approval was indicated two months ago when VanEck’s first spot Solana ETF appeared on the Depository Trust & Clearing Corporation’s website under the ticker VSOL.
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Crucially, the SEC has also indicated that, under certain conditions, activities related to liquid staking may not be classified as securities as defined by the Securities Act of 1933 and the Securities Exchange Act of 1934.
Paul S. Atkins, the newly appointed SEC Chairman, emphasized the agency’s dedication to offering clear regulatory guidance for innovative financial practices. He referred to the staff statement on liquid staking as an essential step in determining which cryptocurrency asset activities fall outside the SEC’s jurisdiction.
On Friday, VanEck’s new spot Solana ETF application triggered a surge in SOL’s price by double digits, achieving a 10% increase in a 24-hour period that brought the cryptocurrency close to the $200 mark.
Featured image from DALL-E, chart from TradingView.com
