SEC Signals Possible Approval of Solana-Based ETF Staking Feature Under Review

SEC Signals Possible Approval of Solana-Based ETF Staking Feature Under Review

1. SEC Prepares for Potential Solana ETF Approval

The U.S. Securities and Exchange Commission (SEC) appears to be moving toward approving a Solana (SOL)-based exchange-traded fund (ETF). According to CoinGape, the SEC has asked prospective ETF issuers to revise and resubmit their S-1 registration documents. This step is seen as part of preparations for a potential approval by mid-summer.

2. Key Revisions: In-Kind Redemption & Staking Clarification

The SEC’s request focused on two major aspects

Clarifying the In-Kind Redemption Process

Issuers must clearly explain how ETF shares can be redeemed for the underlying asset (Solana) rather than for cash. This in-kind structure is a key feature of crypto ETFs, offering tax efficiency and operational flexibility.

Detailing the Staking Mechanism

More notably, the SEC asked for a thorough explanation of how staking would be managed within the ETF. This signals that the agency may be open to allowing staking rewards as part of the ETF structure—an area that has been controversial in past crypto ETF filings.

3. Staking: A Regulatory Hurdle or a New Opportunity?

Staking, while fundamental to Proof-of-Stake (PoS) blockchains like Solana, has long been a gray area when it comes to regulated financial products.

During the Ethereum ETF deliberations, the inclusion of staking was a major point of contention and even caused delays in approval processes.

Now, the SEC’s willingness to review and potentially accommodate staking in a Solana ETF could mark a shift in regulatory thinking.

4. Implications for the Crypto Market

Evolving Regulatory Perspective

The SEC’s latest request suggests a softening stance, indicating a move toward embracing the operational uniqueness of blockchain-based assets.

Solana’s Leap Toward Institutional Legitimacy

If approved, a Solana ETF would become a major milestone—not only for Solana but for newer blockchain platforms aiming to join the ranks of BTC and ETH in regulated markets.

Increased Institutional Inflows Expected

A diversified ETF landscape, including Solana, could attract broader institutional capital beyond Bitcoin and Ethereum.

The SEC’s engagement with Solana ETF issuers, particularly regarding staking, raises the probability of an eventual green light.

If approved, it would not only validate Solana’s role in the crypto ecosystem but also serve as a blueprint for future PoS-based ETFs.