Franklin Templeton Files First-of-Its-Kind Solana ETF with SEC

Franklin Templeton Files First-of-Its-Kind Solana ETF with SEC — Staking Mechanism Sparks Institutional Race​
New York, USA – February 27, 2025

In a landmark move for crypto adoption, Franklin Templeton—one of the world’s largest asset managers with $1.46 trillion in AUM—has submitted a groundbreaking application to the U.S. Securities and Exchange Commission (SEC) for a ​Solana (SOL) Spot ETF​ that includes ​staking rewards​ as part of its structure. The filing, dated February 21, positions SOL as the next major battleground for crypto ETFs following Bitcoin and Ethereum approvals.

​Key Details of the Proposal​
​Staking Integration:
The proposed ETF would allow investors to earn staking rewards in SOL by participating in network validation. Franklin Templeton’s registration statement explicitly states: “The Fund may stake a portion of its SOL holdings to generate additional tokens, which will be treated as income”. This marks the first time a U.S. ETF applicant has formalized staking mechanics, bypassing prior regulatory hesitations.

​Regulatory Tailwinds:
The SEC’s newly formed crypto task force recently met with stakeholders like Jito Labs and Multicoin Capital to discuss staking viability in ETFs. Analysts speculate that leadership changes at the SEC under a crypto-friendly administration have increased approval odds for SOL ETFs to ​70%, with a potential greenlight by Q4 2025.

​Market Impact:
SOL surged 12% to $220 following the news, as traders anticipate institutional inflows. Bloomberg ETF analyst James Seyffart noted, “This isn’t just about Solana—it sets a precedent for Proof-of-Stake assets like Cardano and Polkadot to enter regulated markets”.

​Competitive Landscape Heats Up​
Franklin Templeton joins five other firms vying for Solana ETF approval, including:

​Grayscale: Filed via NYSE Arca, leveraging its precedent-setting Bitcoin ETF victory.
​VanEck​ and ​21Shares: Submitted joint applications through Cboe BZX, emphasizing SOL’s utility in decentralized apps (DApps).
​Bitwise​ and ​Canary Capital: Focused on SOL’s low-fee, high-throughput blockchain infrastructure.
Notably, SOL now leads the “altcoin ETF race” with ​six active filings, outpacing XRP (5) and Litecoin (3).

​Risks and Regulatory Hurdles​
​Securities Classification:
The SEC has historically viewed proof-of-stake tokens like SOL as potential securities—a stance challenged by Ripple’s partial court victory in 2023. Franklin Templeton’s legal team argues SOL’s decentralized governance and lack of fundraising disqualify it as a security.

​Staking Risks:
The filing acknowledges “slashing” penalties—where validators lose tokens for network failures—as a key investor risk. However, Franklin Templeton plans to mitigate this by partnering with institutional-grade validators like Jito Labs.

​Political Uncertainty:
A potential shift in SEC leadership or renewed anti-crypto legislation could delay approvals. Analysts warn SOL’s correlation with Bitcoin (currently 0.89) may amplify volatility during prolonged reviews.

​Broader Implications for Crypto ETFs​
​Ethereum Precedent: The SEC’s pending decision on NYSE’s staking-enabled Ethereum ETF (filed by Grayscale) will likely influence SOL’s timeline.
​Global Adoption: MiCA-compliant staking mechanisms in Europe have already boosted SOL’s institutional custody demand, with Banking Circle and Fidelity Digital Assets expanding SOL services.
​**What’s Next?
The SEC will open a 45-day public comment period on Franklin Templeton’s S-1 filing, with a final decision expected by ​October 17, 2025. Approval could unlock 4–8 billion in institutional SOL investments within the first year, according to J.P. Morgan projections.

As crypto veteran Linda Parker remarked, “This is Web3’s ‘Netscape Moment’—staking ETFs could onboard millions to blockchain economies.”

Disclaimer: Cryptocurrencies are highly volatile and unregulated. This article does not constitute financial advic