tl;dr
Cboe BZX has submitted a proposal to the SEC to list the Invesco Galaxy Solana ETF, a collaboration between Invesco and Galaxy Digital, aiming to offer regulated exposure to Solana through traditional securities. The ETF would track the Lukka Prime Solana Reference Rate, updated every 15 seconds, an...
Cboe BZX has formally submitted a proposal to the U.S. Securities and Exchange Commission (SEC) to list shares of the Invesco Galaxy Solana ETF, marking a significant step toward introducing Solana into regulated U.S. markets. This initiative is a collaboration between global asset manager Invesco and crypto-centric financial firm Galaxy Digital. The ETF aims to provide investors with regulated exposure to Solana’s native token through traditional securities channels.
The proposal outlines that the ETF would track the "Lukka Prime Solana Reference Rate," a real-time pricing benchmark aggregating Solana prices from major exchanges such as Coinbase and Binance. This rate updates every 15 seconds to ensure fair market value pricing. Moreover, the trust could stake part of its SOL holdings via trusted staking providers, potentially generating additional returns for investors.
The filing argues that Solana’s market attributes justify approval without the need for a surveillance-sharing agreement with a regulated futures market. However, Kadan Stadelmann, CTO at Komodo Platform, cautions that proof-of-stake networks like Solana carry unique risks. He points out centralization concerns since validators secure their status by staking tokens rather than computational work. Stadelmann also highlights the possibility of market manipulation due to Solana’s thin trading book and notes the concentration of staked SOL among few validators, raising risks of collusion.
The Solana ETF proposal encounters a complex regulatory backdrop with the SEC currently displaying caution toward crypto products. On July 30, the SEC delayed its decision on Invesco Galaxy’s Ethereum ETF staking proposal, extending the review period until September 25. The agency has also postponed rulings on other crypto offerings, including the Truth Social Bitcoin ETF and Grayscale’s Solana Trust conversion. Notably, the SEC blocked two staff-approved multi-asset crypto ETFs recently—Grayscale’s Digital Large Cap Fund and Bitwise’s 10 Crypto Index ETF.
In response to regulatory hurdles, Cboe BZX and NYSE Arca have submitted separate proposals to the SEC advocating for a fundamental overhaul of the crypto ETF approval process. They propose that certain crypto products should be allowed to list automatically, bypassing the current case-by-case review, aligning the treatment of crypto ETFs with that of traditional asset classes.