The U.S. Securities and Exchange Commission (SEC) has officially acknowledged the filing for the Canary Solana Trust, an exchange-traded fund (ETF) proposed by Cboe BZX Exchange. The filing, submitted on January 28, 2025, seeks approval to list and trade shares of the trust, which will track the price of Solana (SOL).
SEC Responds To Canary Capital’s Solana ETF Application
According to the SEC’s notice, the proposed ETF will be listed under BZX Rule 14.11(e)(4), which governs Commodity-Based Trust Shares. “The Exchange proposes to list and trade the Shares under BZX Rule 14.11(e)(4), which governs the listing and trading of Commodity-Based Trust Shares on the Exchange,” the filing states.
The trust, structured as a Delaware statutory trust, will be sponsored by Canary Capital Group LLC. The filing clarifies that the trust is not an investment company under the Investment Company Act of 1940 nor a commodity pool under the Commodity Exchange Act. Additionally, the trust and its sponsor are not subject to regulation as a commodity pool operator or a commodity trading adviser.
The SEC’s notice outlines that, similar to prior approvals for Bitcoin and Ethereum ETFs, the proposed Solana ETF does not have a futures market of significant size. However, the exchange argues that other measures are in place to prevent fraud and manipulation. “The Exchange and the Sponsor believe that this proposal and the included analysis are sufficient to establish that the proposal is consistent with the Act,” the filing states.
Solana, the underlying asset of the trust, is described as a decentralized network utilizing a Proof-of-History (PoH) consensus mechanism. The filing highlights potential risks associated with this technology, including possible failures in its implementation or vulnerabilities in the cryptographic framework.
The trust’s SOL holdings will be stored by a third-party custodian, which is responsible for securing private keys and ensuring that assets are kept in cold storage. “The Custodian will safeguard the private keys to the SOL associated with the Trust’s SOL account,” the filing states.
Regarding creation and redemption, the trust will operate exclusively in cash transactions. Authorized participants will exchange cash for shares, and the trust will purchase or sell SOL through third-party trading partners. “The authorized participants will deliver only cash to create Shares and will receive only cash when redeeming Shares,” according to the filing.
The SEC’s acknowledgment of the filing initiates a review period, during which the public can submit comments. The Commission has up to 45 days to approve, disapprove, or extend the review of the proposal.
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Source: https://www.cryptonewsz.com/sec-acknowledge-canarycapital-solanaetf-filing/