Breaking: VanEck Files JitoSOL ETF After SEC Says Liquid Staking Isn’t a Security

Asset manager VanEck has filed for a JitoSOL ETF with the U.S. Securities and Exchange Commission (SEC). This marks a historic shift as this fund could become the first to invest mainly in a liquid staking token (LST).

VanEck Files S-1 For JitoSOL ETF With SEC

A SEC filing has shown that the asset manager has filed its registration statement to offer a JitoSOL with the Commission. This fund will primarily hold the liquid staking token, providing institutional investors with spot exposure to the token.

This move follows the SEC’s guidance on liquid staking activities, in which the Commission clarified that they do not classify them as securities. This paves the way for the potential approval of the JitoSOL ETF since LST doesn’t qualify as a security.

Furthermore, VanEck noted in the filing that the fund expects to receive certain staking rewards through its ownership of JitoSOL. The LST is the native token of the liquid staking protocol Jito, which users receive when they stake their Solana tokens.

This means that VanEck will need to acquire Solana for its JitoSOL ETF, which it will then stake with the Jito protocol and receive these LSTs in return. The asset manager will also receive staking rewards in the process, while they may use their tokens for other DeFi purposes. Notably, the asset manager was one of those who had urged the SEC to approve LSTs in Solana ETFs.

Following the S-1 filing, a stock exchange is expected to file the 19b-4 form to list and trade shares of this JitoSOL ETF. The 19b-4 filing will also kickstart the review process, with the SEC having to deny or approve the proposed rule change eventually.

TradingView data shows that the JitoSOL price is up amid this filing. The LST is currently trading at around $236, up over 6% in the last 24 hours.

Significance Of The ETF Filing

In an X post, Jito Foundation’s lead, Brian Smith, highlighted the significance of VanEck’s ETF filing. He noted that the biggest problem with staked Solana ETFs is the unbonding periods that complicate ETFs’ daily requirements.

This forces natively staked ETFs to hold 25% of their assets under management in spot Solana. If not, they run the risk of a bank run when they cannot honor investor redemptions.

Smith explained that this is where funds like the JitoSOL ETF come in, as they solve the dilemma of trying to earn as much yield while also having a liquid fund. 100% LST-backed ETFs enable fund issuers to fully stake the underlying asset, while the mechanics for creation and redemption are easier with the LST.