Grayscale Files for Spot Solana ETF with SEC

Grayscale’s Solana ETF filing with the SEC aims to offer a regulated investment option for the rapidly growing SOL cryptocurrency.

Grayscale’s Move to Launch Solana ETF

Grayscale Investments has requested approval from the US Securities and Exchange Commission (SEC) for a spot Solana exchange-traded fund (ETF). The move aims to convert the firm’s Grayscale Solana (SOL) Trust into a spot ETF, similar to the firm’s prior efforts with Bitcoin and Ether ETFs.

Once the SEC approves, the proposed Solana ETF, under the ticker GSOL, could soon be available for trading on the New York Stock Exchange. The Solana ETF would offer a direct and regulated investment vehicle for Solana (SOL), one of the fastest-growing cryptocurrencies.

According to Grayscale, the trust holds $134.2 million in assets, making it the largest Solana investment fund globally. Still, the trust represents approximately 0.1% of all SOL in circulation.

Custody Arrangements

As part of its filing, Grayscale confirmed that Coinbase Custody would serve as the custodian for the Solana ETF, while BNY Mellon Asset Servicing would manage its administration and transfers. The filing also notes the need for an S-1 registration statement, which, if approved, would allow Grayscale to list its Solana ETF publicly.

Launching a Solana ETF could broaden the acceptance of the SOL cryptocurrency. Over the past 12 months, the digital asset has surged by 277%, reaching a market cap of over $112 billion.

At the time of writing, Solana is trading at $238, an almost 4% increase since the filing, further demonstrating the growing demand for this cryptocurrency.

Rising Competition in the Solana ETF Space

Grayscale is not alone in its pursuit of a Solana ETF. Rivals 21Shares, Canary Capital, VanEck, and Bitwise have also filed their applications with the SEC.

Franklin Templeton is also considering a Solana ETF. The increasing number of asset managers making this filing highlights the rising interest in Solana as an investment product, particularly as institutional investors seek ways to gain cryptocurrency exposure.

With SOL’s market cap exceeding $100 billion and growing institutional interest, approval of a Solana ETF could significantly impact the broader cryptocurrency market. A successful launch could attract more traditional investors to SOL and other digital assets.

Solana Ecosystem Evades Supply Chain Attack

Meanwhile, the Solana ecosystem swiftly contained a supply chain attack, but some users suffered significant losses. The Solana development team Anza disclosed that an assailant had hacked an account with publishing authorization to a Solana JavaScript library.

This breach allowed malicious code to target private key data, draining funds from decentralized applications (dApps) that depend on private keys. The malicious code primarily affected developers who recently updated their systems, particularly those running JavaScript bots or backend systems interacting with private keys.

However, the attack didn’t impact the Solana blockchain because it does not reveal private keys during transactions. Moreover, Phantom and other popular non-custodial wallets remained unaffected.

In its official statement regarding the incident, Phantom assured users their funds were safe. A well-known Solana enthusiast, Mert Mumtaz, reassured the community that the breach had been contained.

He explained that the malicious activity mainly affected developers using outdated versions of the JavaScript library.

Six-Figure Losses from Stolen Assets

On-chain data indicated that the attack resulted in an estimated $160,000 in stolen assets, primarily in SOL tokens. The hacker’s wallet account had approximately $161,000 in SOL and other tokens worth about $31,000.

The breach highlights the vulnerability of backend systems used by developers utilizing private keys. However, DeFiLlama developer 0xngmi remarked that the damage could have been much worse.

The analyst pointed out that the hacker’s direct targeting of private keys limited the potential scale of the attack. Unlike more sophisticated exploits like the one in the 2023 Ledger hardware wallet hack, the network contained this attack before it could impact a broader user base.

On-chain data shows that SOL’s market cap is $108.9 billion, up 2.1% over the past day.