Grayscale moves closer to Solana ETF with SEC filing

Grayscale has taken the next step in its efforts to launch a spot Solana exchange-traded fund (ETF).

On April 4, the digital asset manager filed a Form S-1 with the US Securities and Exchange Commission (SEC), aiming to convert its existing Grayscale Solana Trust (GSOL) into a publicly traded ETF.

Crypto traders on the decentralized prediction platform Polymarket are placing the odds of SEC approval for a Solana ETF at 83% before the end of the year.

However, expectations for an earlier decision are lower, with just a 23% chance of approval predicted before July 31.

Solana ETF

Grayscale’s recent submission comes nearly four months after the firm’s initial 19b-4 filing, which the SEC officially acknowledged on Feb. 6.

If approved, the fund would be renamed the Grayscale Solana Trust ETF and listed on the NYSE Arca exchange.

Grayscale also revealed that the product would start with a cash-only creation and redemption system. It added:

“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 act as the ETF’s custodian, while BNY Mellon will serve as the fund’s administrator and transfer agent.

No staking

Grayscale confirmed that the ETF will not engage in staking or earn yield from Solana’s proof-of-stake network.

According to the filing:

“None of the Trust, the Sponsor, the Custodian, nor any other person associated with the Trust will, directly or indirectly, engage in Staking (as defined herein), meaning no action will be taken pursuant to which any portion of the Trust’s SOL becomes subject to Solana proof-of-stake validation or is used to earn additional SOL or generate income or other earnings.”

The conservative approach reflects ongoing regulatory caution. Under former SEC Chair Gary Gensler, the agency took a hard stance on staking, including lawsuits against several crypto platforms and pushback on staking features in proposed Ethereum ETFs.

However, with a new administration in place, sentiment is shifting. Industry players are renewing efforts to integrate staking into ETF structures for proof-of-stake assets like Ethereum and Solana. Experts argue this could unlock additional yield for investors while complying with federal regulations.