The Securities and Exchange Commission has acknowledged Fidelity’s proposal for a spot Solana exchange-traded fund, triggering the formal review process. Filed on March 25 and amended on April 1 by Cboe BZX Exchange, the rule change would allow the listing and trading of shares for the Fidelity Solana Fund under existing commodity-based trust rules.
The acknowledgement, issued on April 3, is expected to be published in the Federal Register, setting in motion the timeline for public comment and SEC deliberation. This procedural step marks a critical milestone in what could become the first spot ETF for Solana, the seventh-largest cryptocurrency by market capitalization.
Solana Declines Despite ETF Progress
On the same day the SEC issued its notice, Solana’s price dropped as much as 15%, falling below $113 before slightly recovering to $115.42 by 4:40 p.m. EST. The decline followed renewed market volatility sparked by sweeping tariffs announced by President Donald Trump. Broader cryptocurrency markets also fell, with both Bitcoin and Ethereum down more than 4%.
Despite the drop, the filing places Solana alongside Bitcoin and Ethereum, which now have approved spot ETFs. Fidelity’s fund, if cleared, would allow investors to gain exposure to Solana’s price without directly holding the asset.
The Fidelity Solana Fund was formed as a Delaware statutory trust on March 20 and is operated as a grantor trust. FD Funds Management LLC acts as the sponsor, with CSC Delaware Trust Company serving as trustee. The fund’s shares will represent fractional interests in SOL held in custody. The custodian will maintain the assets in segregated cold storage addresses verifiable on the blockchain.
According to the filing, the trust may stake a portion of its SOL holdings through trusted providers. Any rewards from staking activities would be treated as income. The fund will disclaim any rights to forked or airdropped tokens, which will not factor into its net asset value.
SEC Precedents and Surveillance Standards
The SEC has consistently evaluated crypto ETFs under Section 6(b)(5) of the Exchange Act. That section requires exchanges to prevent fraud and manipulation and ensure investor protection. Historically, approval depended on the existence of a surveillance-sharing agreement with a regulated market of “significant size.” This standard, referred to as the Winklevoss Test, originated with the SEC’s 2018 denial of a Bitcoin ETF proposed by Gemini founders Tyler and Cameron Winklevoss.
In recent decisions, however, the SEC approved spot Bitcoin and Ethereum ETFs without such agreements, citing “other means” to monitor for manipulation. The Solana proposal argues it meets this revised standard. The exchange asserts that SOL’s global trading activity, estimated at $2 billion in daily volume across six major platforms, and a 180-day fully diluted market cap averaging over $90 billion, reduce susceptibility to manipulation.
Cboe BZX claims SOL’s decentralized infrastructure, fragmentation across platforms, and active arbitrage mechanisms would make coordinated manipulation prohibitively costly. These characteristics, it contends, compare favorably to approved ETP assets like gold or copper.
If approved, the Fidelity Solana Fund would trade under Rule 14.11(e)(4), with the SEC requiring at least 100,000 shares outstanding at listing. The trust will publish its daily NAV at 4:00 p.m. ET based on the Fidelity Solana Reference Rate, calculated from aggregated spot trading data.
Intraday indicative values will update every 15 seconds during regular trading hours. Real-time quotes and trade data will be available through major vendors including Bloomberg and Reuters, with additional transparency from the trust’s website.
Creation and redemption of fund shares will occur in both cash and in-kind SOL, at the discretion of authorized participants. The custodian is contractually prohibited from lending or encumbering assets without the trust’s instruction.
The proposal contends that these measures, along with SEC-mandated trading halt mechanisms, meet statutory requirements and protect investors. Approval of the fund would follow a series of regulatory firsts, placing Solana in line with the growing class of approved digital asset ETFs.
