On July 31, Jio Labs jointly wrote a letter to the US Securities and Exchange Commission to permit the use of Liquid Staking Tokens in Exchange Traded Products (ETPs).
The alliance of the additional signatories includes Jito Foundation, Bitwise Asset Management, Solana Policy Institute, and Multicoin Capital Management.
The letter reads: “Jito Labs, Inc. and the Jito Foundation (together, “Jito”), and the additional signatories hereto, respectfully submit this letter to the U.S. Securities and Exchange Commission (“SEC” or the “Commission”) to advocate for the use of liquid staking tokens (“LSTs”) as a mechanism for staking within exchange traded products (“ETPs” and, with staking, “Staked ETPs”).1 Most immediately, we advocate for the use of LSTs within the Solana (“SOL”) ETPs at issue in the eight S-1s filed on or around June 13, 2025, and the additional application filed June 25, 2025 (collectively, the “Solana ETP Applications”).”
What are Liquid Staking Tokens ETPs?
Liquid staking tokens are derivatives issued to users who stake their cryptocurrency on proof-of-stake (PoS) blockchains like Solana. Unlike traditional staking, where tokens are locked and illiquid, liquid staking allows users to receive a tradable token (such as mSOL, JitoSOL, LsSOL) that represents their staked assets.
These tokens can be used in decentralized finance (DeFi) protocols for trading, lending, or yield farming, while still earning staking rewards. This enhances capital efficiency by maintaining liquidity.
LST ETPs are the investment vehicle traded on traditional exchanges, which combine the benefits of staking with the structure of ETPs. This allows investors to gain exposure to both the price movements of SOL and its staking rewards without needing to manage wallets or validators.
Solana ETF Approval Chances Increase as the Stars Align
The crypto ETP sector has witnessed a huge shift in early 2025 as major financial institutions began aggressively pursuing staking capabilities for their funds. The movement gained momentum on February 14 when NYSE Arca filed Grayscale’s groundbreaking proposal to stake assets held by its Ethereum Trust ETF and Ethereum Mini Trust through approved providers.
Adding to this, BlackRock declared staking would represent “a step change upward” for crypto ETPs in its February filing.
On July 2, REX Shares created history by listing the REX-Osprey Solana + Staking ETF (SSK) on the Cboe exchange, becoming the first US-listed Solana Staking ETF. It gives investors exposure to directly staked SOL, other Solana ETPs, and liquid staking tokens (LSTs) like JitoSOL, while passing through 100% of staking rewards to shareholders.
On the other hand, no Ethereum staking Exchange Traded Products (ETPs) have been approved in the United States by the SEC.
As of July 31, there are nine pending spot SOL ETFs with staking in the US SEC asked prospective Solana ETF issuers to submit amended S-1 forms. This includes:
- VanEck SOL Trust
- 21Shares Core SOL ETF
- Fidelity SOL ETF
- Grayscale SOL Trust
- Bitwise SOL ETF
- Franklin Templeton SOL ETF
- Canary Capital SOL ETF
- CoinShares SOL ETF
- Invesco Galaxy SOL ETF
SEC Clears Path for Solana Staking ETFs
The U.S. securities regulator has removed critical roadblocks for Solana-based investment products with groundbreaking staking guidance issued May 29, 2025. The SEC’s new framework declares that:
- Solo staking (running your validator) isn’t a securities transaction
- Delegating stake to validators avoids securities classification
- Staking services (custodial or non-custodial) don’t trigger securities laws
The ruling clarifies that staking rewards come from “administrative” network participation rather than third-party managerial efforts – a crucial distinction that enabled the recent launch of the REX Solana Staking ETF (SSK).
This regulatory clarity opens doors for more crypto staking products using traditional fund structures, with analysts predicting a wave of new Solana ETP filings. The decision marks a turning point for proof-of-stake assets seeking mainstream financial adoption while maintaining decentralized principles.
Also Read: CBOE Files With SEC for Fast-Track Approval for Crypto ETPs
