Mar. 28, 2025
Hello, I am writing to express my deep concerns regarding the premature approval of a Solana-based Exchange-Traded Fund (ETF) and to urge the Commission to postpone any such decision until a thorough investigation into the underlying risks and market dynamics can be conducted. The cryptocurrency space, while innovative, remains a Wild West of speculation, manipulation, and untested financial instruments that could pose significant threats to retail investors and the broader financial system. Solana, in particular, raises red flags that cannot be ignored, and I implore the SEC to take a step back and scrutinize this proposal with the skepticism it deserves. First and foremost, Solana’s blockchain, despite its touted high throughput and low transaction costs, has a troubling history of network instability. The chain has experienced multiple outages—some lasting hours—over the past few years, exposing vulnerabilities that undermine its reliability as a foundation for a regulated financial product. An ETF tied to such an asset could leave investors stranded during critical market moments, unable to trade or redeem their shares due to technical failures beyond their control. The SEC’s mandate is to protect investors, and rushing to approve a Solana ETF without ironclad assurances of operational stability would be a dereliction of that duty. Moreover, the Solana ecosystem is riddled with speculative excess. The proliferation of meme coins, pump-and-dump schemes, and questionable token launches on its network paints a picture of a platform more akin to a casino than a serious financial infrastructure. Just look at the countless projects that have launched with little substance, only to collapse or vanish, leaving investors holding the bag. For instance, there’s chatter about tokens with addresses like 6VSwTTYqHcgms7QSMk5yQQatFyT2sB9gKZHryxjQpump circulating in the ecosystem—projects that seem to epitomize the hype-driven, substance-lacking ventures that Solana has become known for. I’m not here to vouch for or against any specific token, but their existence alone should raise eyebrows at the SEC. How can a blockchain so intertwined with such volatility and apparent recklessness be deemed a suitable backbone for an ETF meant to attract mainstream investors? The concentration of SOL token ownership is another glaring issue. Reports suggest that a significant portion of Solana’s supply is held by early investors, venture capital firms, and insiders who stand to profit immensely from an ETF approval. This centralization undermines the decentralized ethos that cryptocurrencies supposedly champion and creates a ripe environment for market manipulation. If an ETF drives up demand for SOL, these whales could orchestrate coordinated sell-offs, crashing the price and leaving retail investors—who are often the last to enter such markets—devastated. The SEC has a responsibility to investigate the ownership structure of Solana and ensure that an ETF wouldn’t simply serve as a cash-out mechanism for a privileged few at the expense of the many. Let’s not forget the regulatory uncertainty surrounding Solana itself. The SEC has yet to definitively classify SOL as a security or a commodity, and ongoing lawsuits—like those involving other major cryptocurrencies—cast a shadow over its legal status. Approving an ETF before this ambiguity is resolved would be putting the cart before the horse, exposing investors to potential regulatory whiplash if SOL is later deemed an unregistered security. The fallout could include delistings, fines, or worse, a complete unraveling of the ETF’s value. The Commission must demand clarity on this front before even considering such a product. And then there’s the broader market context. Cryptocurrency prices, including SOL, are notoriously volatile, driven more by sentiment and hype than by fundamental value. We’ve seen this movie before—Bitcoin and Ethereum ETFs were approved only after years of deliberation and market maturation. Solana, by contrast, feels like a newcomer trying to skip the line. Its market cap may be impressive, but its staying power is unproven. A sudden crash in SOL’s price—triggered by a network failure, a whale dump, or a regulatory crackdown—could destabilize an ETF and ripple through the financial system, especially if institutional investors pile in without fully understanding the risks. I urge the SEC to dig deeper. Investigate the Solana Foundation’s claims, audit the network’s technical resilience, and subpoena data on token distribution and trading activity. Demand transparency from ETF applicants about how they plan to mitigate these risks. The American public deserves better than a rushed approval that prioritizes Wall Street profits over Main Street stability. Postponing a Solana ETF isn’t just prudent—it’s essential to uphold the integrity of our markets. Thank you for your attention to this matter.