New wave of crypto ETFs edge closer to launch after SEC scrutiny

New wave of crypto ETFs edge closer to launch after SEC scrutiny
Asset managers looking to debut Solana-focused funds could get the green light soon as the regulator asks for key amendments.
JUN 11, 2025
By  Bloomberg

US regulators have asked Wall Street firms racing to launch Solana exchange-traded funds to revise their paperwork, a sign that the novel crypto investment products may be available to investors soon.

At least three asset managers have been asked to amend their US Securities and Exchange Commission filings to address two key features of the funds that track the world’s sixth-largest cryptocurrency. At issue are how funds will handle crypto redemptions and whether they plan to allow investors to earn rewards by pledging Solana tokens to help validate blockchain transactions, a process known as staking.

The outreach suggests the Wall Street watchdog may be poised to give the next wave of ETFs its blessing, months after giving the green light to funds tied to Bitcoin and Ether

“The SEC’s nudge that ETF issuers amend their S-1 filings sounds like it could be just a matter of days or at the most weeks before approval becomes official,” said Noelle Acheson, author of Crypto is Macro Now newsletter. “That would be a huge change for the spot crypto market.”

The firms need approval of their S-1 registration statements, which outline details about the ETF’s structure, strategy and risks, and a document known as form 19b-4.

“We have been asked to address and file an amended S-1, which we plan to do so shortly,” said a spokesperson from 21Shares AG. 

Two other fund issuers bidding to launch Solana ETFs confirmed similar feedback from the SEC, according to people familiar with the matter. 

Blockworks was first to report the SEC requests.

Complicating the process is how far Solana fund issuers can go in replicating the structure of traditional ETFs while dealing in speculative tokens that operate differently from stocks and bonds. It’s unclear whether the funds will be allowed to redeem shares using the underlying crypto asset rather than cash, also known as in-kind redemptions. While this mechanism is relatively straightforward in traditional asset classes, it’s far more complex in crypto products due to challenges around custody, security and settlement.

Another flashpoint is staking — a core feature of so-called proof-of-stake blockchains like Ethereum and Solana — which allows holders to earn returns. Staking raises questions about whether such tokens should be treated as securities.

“Anybody who is putting cash into a product without staking is losing out on yield,” said Bloomberg Intelligence ETF analyst James Seyffart. Case in point: Solana staking yields north of 5%, according to data by Coinbase Global Inc., while Ether generates some 2%.

If in-kind redemptions and staking are allowed, “these ETFs will make products better as long-term investments,” Seyffart said. 

Currently there are at least seven issuers hoping to launch Solana ETFs, according to data compiled by Bloomberg Intelligence. This includes Grayscale Investments LLC, Bitwise Asset Management, VanEck Asset Management and Canary Capital. 

Recently, two proposed ETFs from REX Financial and Osprey Funds that would allow staking were caught in the cross-hairs of the SEC. After the issuers said they could launch in mid-June, the watchdog questioned whether these funds meet the definition of an investment company under federal law.

The situation however “may end up forcing the agency’s hand,” wrote BI’s Seyffart and Eric Balchunas, in a note. “We think the SEC may now focus on handling 19b-4 filings for Solana and staking ETFs earlier than planned.”

Solana ETFs have a 90% chance of being approved by this year, they added.

Latest News

Alaris Acquisitions CEO: AI-driven staff reductions could boost RIA valuations
Alaris Acquisitions CEO: AI-driven staff reductions could boost RIA valuations

CEO Allen Darby sees a coming shift in M&A dynamics as AI eliminates clerical roles at RIAs, leaving buyers and sellers to negotiate who benefits from the added margin.

Private equity in 401(k)s is 'inevitable,' says Meketa Capital CEO
Private equity in 401(k)s is 'inevitable,' says Meketa Capital CEO

Michael Bell explains how the PE push in retirement plans will benefit investors, why warnings around risks may be overplayed, and what it will take to get plan fiduciaries comfortable with private investments.

IRA rollovers from DC plans to hit $1.15T by 2030, LIMRA says
IRA rollovers from DC plans to hit $1.15T by 2030, LIMRA says

Research highlights the dominant role of workplace retirement plans and breaks down the major factors dictating workers' IRA rollover decisions.

GReminders unveils autonomous AI assistant for financial advisors
GReminders unveils autonomous AI assistant for financial advisors

The wealth tech firm is rolling out its "Do Anything" assistant as leaders and strategists tout the next evolution of artificial intelligence.

Court strikes down SEC CAT funding plan, puts broker-dealer costs under fire
Court strikes down SEC CAT funding plan, puts broker-dealer costs under fire

Appeals court overturns SEC’s CAT funding plan, broker-dealers face new uncertainty.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.