Galaxy Digital, a financial services firm focused on cryptocurrency, has published an analysis of VanEck's recent filing for a spot Solana exchange-traded fund (ETF) in the United States. VanEck's filing with the Securities and Exchange Commission (SEC) proposes an exchange-traded commodity-based trust product that would track the price of Solana (SOL) by holding the underlying cryptocurrency.

Galaxy Digital notes that VanEck's filing lacks operational details, such as the designation of a custodian, administrator, cash custodian, authorized participants, or sponsor fee. However, these details can be added in future amendments. The research team at Galaxy Digital highlights that the filing specifically states that the trust will not stake its assets, which means it will not participate in the validation process of the Solana network.

Galaxy Digital's analysis draws attention to several risk disclosures in VanEck's filing, including the concentrated ownership of Solana, with 100 wallets controlling 33% of the SOL in circulation as of November 2023. Additionally, VanEck's filing discloses that shareholders may not receive the benefits of airdrops or forked assets and that the exit of validators could increase the risk of network attacks.

Galaxy Digital expresses skepticism about the approval chances of this ETF application, citing the SEC's current allegation that Solana is an unregistered security. The firm notes that the SEC's approval of spot-crypto exchange-traded products (ETPs) typically involves a process that includes launching regulated futures, approving ETPs that hold those futures, and approving Canadian spot-ETPs. However, the absence of SOL futures and the SEC's legal stance on Solana make it unlikely that the application will be approved without a significant change in regulatory posture or legislation.

In conclusion, Galaxy Digital's analysis provides insight into VanEck's surprise move on the Solana ETF and the potential outcome of the SEC's review process. While VanEck's filing is a significant development in the cryptocurrency market, Galaxy Digital's skepticism about the approval chances highlights the challenges that cryptocurrency ETFs face in the regulatory environment.