Cboe BZX Exchange Reignites Race for Solana ETFs with New Filings

Cboe BZX Exchange has reignited the race for Solana-based ETFs by submitting a new batch of applications on behalf of four leading investment firms on Tuesday.

The exchange filed 19b-4 documents for the Canary Solana Trust, Bitwise Solana ETF, 21Shares Core Solana ETF, and VanEck Solana Trust. These filings mark the restart of the SEC's review process for spot Solana investment products, following the withdrawal of previous applications last year at the regulator's request.

If approved, these ETFs would provide traditional investors with exposure to Solana without directly holding the cryptocurrency, potentially expanding access to the digital asset market.

This development builds on the momentum of recent crypto ETF approvals, with Bitcoin and Ethereum-based ETFs receiving SEC clearance in early 2024.

However, Solana faces distinct regulatory challenges that differ from Bitcoin and Ethereum. A key issue is whether Solana will be classified as a commodity or security, a distinction that has been pivotal in previous ETF approvals.

The Canary Solana Trust and VanEck Solana Trust are seeking approval under commodity-based trust frameworks, similar to successful Bitcoin and Ethereum ETF strategies. Both proposals argue that Solana qualifies as a commodity due to its decentralized structure and proof-of-stake consensus mechanism.

Both proposals also assert that manipulation can be prevented without the usual surveillance-sharing agreements required by the SEC, citing high trading volumes and global markets that operate around the clock.

While both sponsors emphasize SOL's commodity status and market maturity, their approaches to regulatory concerns differ. VanEck highlights declining ownership concentration and validator autonomy, showing that top wallet holdings dropped to 26.5% last year. Canary, in contrast, focuses on operational safeguards, such as segregated cold storage and precise NAV (net asset value) calculations, positioning its product within established crypto-commodity ETF frameworks.

Meanwhile, Grayscale has separately sought to convert its existing Solana Trust into an ETF on NYSE Arca, further advancing its Solana ETF efforts.

This renewed push comes as Solana remains the third-largest cryptocurrency, with a market capitalization of over $111 billion, according to CoinGecko.