The proposed fund, named the 21Shares Core Solana ETF, will not engage in staking SOL.
21Shares, a popular issuer of cryptocurrency exchange-traded products (ETPs), has submitted an S-1 filing with the U.S. Securities and Exchange Commission (SEC) for a new exchange-traded fund (ETF) focused on Solana (SOL), one of the fastest-growing blockchain ecosystems in the digital asset space.
The proposed ETF will be listed for trading on the Cboe BZX Exchange. Coinbase is designated as the custodian responsible for safeguarding the fund’s holdings in Solana, with private insurance coverage.
The fund’s assets will be stored in segregated wallets on the Solana blockchain. It will not engage in SOL validation or staking. The intra-day value of shares will be recalculated every 15 seconds. Additionally, the valuation of SOL within the fund will be assessed daily.
Solana as a Security
According to 21Shares’ filing on the SEC’s website, if SOL is eventually classified as a security, and the sponsors choose not to comply with the associated regulatory and registration requirements, they will terminate the Trust
Many experts predict that the ETFs might face denial, given that the SEC has classified Solana as a security in multiple lawsuits. Moreover, the lack of a futures ETF product for Solana is significant, as the SEC has cited the presence of such products as a critical factor in approving spot Bitcoin and Ethereum ETFs.
However, Matthew Sigel, Head of Digital Strategy at VanEck, disagrees. He states, “There are already commodity ETFs on shipping, uranium, and power where the futures market is immaterial for price formation.”
Following the recent news of the VanEck filing, the price of SOL surged from $139 to $150. As of the time of writing, it was trading at around $141. SOL is the fifth largest crypto by market cap.
Application for Spot ETH ETF
Meanwhile, 21Shares applied for a spot ETH ETF on May 31, naming it the 21Shares Core Ethereum ETF, which followed the termination of their partnership with ARK Invest for that application. Notably, the SEC approved the ARK 21Shares spot ETH ETF 19b-4 filing on May 23.
The SEC reviews and approves S-1 filings independently after the 19b-4 filings. Initially, the partners intended to offer an ETH ETF that included staking but later decided to change their plans.
