Grayscale Files for Solana ETF with SEC
Grayscale, a leading digital asset manager, has taken a significant step in its efforts to launch a spot Solana exchange-traded fund (ETF). On April 4, the company filed a Form S-1 with the US Securities and Exchange Commission (SEC) to convert its existing Grayscale Solana Trust (GSOL) into a publicly traded ETF.
According to crypto traders on the decentralized prediction platform Polymarket, there is an 83% chance of SEC approval for a Solana ETF before the end of the year. However, the likelihood of approval before July 31 is lower, with just a 23% chance predicted.
The recent submission by Grayscale comes after an initial 19b-4 filing, which was officially acknowledged by the SEC on Feb. 6. If approved, the ETF would be renamed the Grayscale Solana Trust ETF and listed on the NYSE Arca exchange.
Grayscale has disclosed that the fund will start with a cash-only creation and redemption system. The company stated, “The Trust is not at this time able to create and redeem shares via in-kind transactions with Authorized Participants, and there has yet to be definitive regulatory guidance on whether and how registered broker-dealers can hold and deal in SOL in compliance with the federal securities laws.”
Coinbase will serve as the ETF’s custodian, while BNY Mellon will act as the fund’s administrator and transfer agent.
Grayscale has confirmed that the ETF will not participate in staking activities or earn yield from Solana’s proof-of-stake network. The company stated, “None of the Trust, the Sponsor, the Custodian, nor any other person associated with the Trust will, directly or indirectly, engage in Staking.”
This conservative approach reflects regulatory caution, particularly regarding staking activities. However, with a new administration in place, there is a shift in sentiment. Industry players are exploring ways to integrate staking into ETF structures for proof-of-stake assets like Ethereum and Solana, potentially unlocking additional yield for investors while complying with federal regulations.