Crypto Analyzer

Galaxy Digital Analysis: VanEck’s Solana ETF Approval Prospects in the U.S.

Galaxy Digital, a prominent crypto-focused financial services firm, recently conducted an analysis on VanEck’s filing for a Solana (SOL) exchange-traded fund (ETF) in the United States. VanEck filed an S-1 with the Securities and Exchange Commission (SEC) to introduce an exchange-traded commodity-based trust product tracking the price of SOL by holding the underlying cryptocurrency.

The analysis by Galaxy Digital pointed out that VanEck’s filing lacked operational details, such as custodian designation and sponsor fee. However, these aspects could be included in future amendments. Notably, the trust indicated it would not stake its assets, as highlighted by Galaxy Digital’s research team.

Galaxy Digital highlighted several risk disclosures in VanEck’s S-1, including concentrated ownership of Solana, potential impacts of airdrops or forked assets, and risks related to the network’s validators. The firm also observed that VanEck had not filed a 19b-4 at the time of the analysis, which determines the timeline for SEC approval or denial of the ETF.

Expressing skepticism about the approval chances, Galaxy Digital referenced the SEC’s ongoing allegations against Coinbase regarding Solana being an unregistered security. The firm outlined the progression typically required for SEC approval of spot-crypto ETPs, emphasizing the hurdles Solana faces due to the absence of futures and regulatory concerns.

While Galaxy Digital noted VanEck’s proactive history in ETF filings, they indicated that without significant regulatory changes, approval for a Solana ETF is unlikely. The firm also mentioned the potential impact of legislative developments, such as the FIT21 Act, on the classification of assets as commodities or securities.

In conclusion, Galaxy Digital acknowledged VanEck’s past filings for Bitcoin and Ethereum ETPs and speculated on the strategic timing of the Solana ETF filing. The analysis provides valuable insights into the regulatory landscape surrounding crypto ETP approvals and the challenges faced by Solana in obtaining SEC approval for an ETF.

For more information, you can visit Galaxy Digital’s original analysis.