On Friday, VanEck, the asset manager and issuer of cryptocurrency exchange-traded funds (ETFs), revealed a new submission for a spot Solana ETF supported by JitoSOL with the US Securities and Exchange Commission (SEC). This signifies a notable departure from other crypto ETFs as it would be the premier fund to adopt a liquid staking token.
A New Chapter For Liquid Staking?
JitoSOL operates as a liquid staking token on the Solana blockchain, encapsulating both staked SOL and the rewards attached to it. This format enables users to stake their SOL via the Jito Network while maintaining the liquidity needed for engaging in decentralized finance (DeFi) applications.
As a result, VanEck’s launch of a fresh spot Solana ETF might offer investors novel opportunities to capitalize on the anticipated expansion of the Solana ecosystem.
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This effort follows recent regulatory advice from the SEC concerning liquid staking operations. During President Donald Trump’s administration, a concerted initiative aimed at establishing the United States as the worldwide leader in cryptocurrency was undertaken.
The Securities and Exchange Commission’s recent change in strategy illustrates this aspiration, as it seeks to refine the regulatory framework for the broader digital asset landscape, a notable shift from the tenure of former Chair Gary Gensler.
Nine Solana ETF Submissions Await SEC Clearance
In August of this year, a coalition of prominent entities, including Jito Labs, VanEck, Bitwise, the Solana Policy Institute, and Multicoin Capital Management, put forth a collective appeal to the SEC seeking endorsement for liquid staking in Solana ETF applications.
The correspondence highlighted the operational benefits that liquid staking could provide for prospective Solana ETF issuers, including improved network security through heightened staking participation, a broader range of investment possibilities for market players, and new revenue channels for ETF providers.
With at least nine Solana ETF applications currently pending SEC approval, it’s evident that interest in this domain is escalating. Significant progress towards approval was indicated two months ago when VanEck’s inaugural spot Solana ETF emerged on the Depository Trust & Clearing Corporation’s site under the ticker VSOL.
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Crucially, the SEC has also indicated that, under certain conditions, activities linked to liquid staking may not qualify as securities according to the definitions set forth in the Securities Act of 1933 and the Securities Exchange Act of 1934.
Paul S. Atkins, the recently appointed SEC Chairman, emphasized the agency’s dedication to delivering clear regulatory direction for innovative financial practices. He referred to the staff statement on liquid staking as a pivotal step for delineating which crypto asset activities fall outside the SEC’s jurisdiction.
On Friday, VanEck’s new spot Solana ETF request prompted SOL’s price to jump by double digits, registering a 10% rise within the 24-hour span, drawing the cryptocurrency near the $200 mark.
Featured image from DALL-E, chart from TradingView.com