I am writing to urge the Securities and Exchange Commission (SEC) to deny approval of a Solana-based Exchange-Traded Fund (ETF) at this time. Recent developments within the Solana ecosystem, as highlighted in the Fintech Blueprint article titled "Analysis: Is Kelsier's $200MM insider trading scandal the next FTX?" (published February 19, 2025), reveal significant risks of market manipulation, insider trading, and systemic fraud that undermine the integrity of Solana as a viable underlying asset for a regulated financial product. Approving an ETF under these conditions would expose retail and institutional investors to undue risk and potentially legitimize a market rife with unresolved governance and ethical issues. The article details a disturbing scandal involving Hayden and Gideon Davis, founders of Kelsier, who allegedly exploited their privileged access to manipulate Solana-based token launches, extracting approximately $200 million through insider trading and sniper bot activities. High-profile memecoins such as $MELANIA and $LIBRA, linked to prominent political figures, were among the targets. The brothers reportedly used advance knowledge of launch timings and coordinated with sniper bots to front-run trades, profiting at the expense of unsuspecting investors. Hayden Davis himself admitted in an interview to "sniping" these launches, rationalizing it as a means to "manage liquidity" or preempt other snipers, while acknowledging holding $100 million in siphoned funds. This brazen admission underscores a lack of accountability and transparency in the Solana ecosystem. Further complicating the matter, the scandal implicates key Solana infrastructure platforms, Meteora and Jupiter. Meteora, a liquidity provision platform founded by the same team behind Jupiter—a decentralized exchange with $2.4 billion in total value locked—allegedly facilitated these manipulated launches. Evidence from a recorded conversation between a DeFi Tuna founder and a Meteora manager suggests that Meteora knowingly enabled Kelsier’s activities, with its CEO resigning amid the fallout. Jupiter, a cornerstone of Solana’s trading ecosystem, is now under scrutiny for potential involvement, with its leadership commissioning an investigation. These platforms are not peripheral actors but integral to Solana’s liquidity and trading infrastructure, raising serious questions about systemic vulnerabilities. The scale of this misconduct echoes prior crypto collapses like FTX and Terra/Luna, where unchecked speculation and insider abuse led to massive investor losses. Solana’s reliance on memecoin speculation—exemplified by platforms like Pump.fun, which generated $234 million in revenue last quarter—further amplifies these risks. The article notes that Solana’s trading volumes and revenues are disproportionately driven by such speculative assets, many of which lack fundamental value and are susceptible to manipulation. This environment contrasts sharply with the stability and investor protections expected of assets underlying SEC-approved ETFs. Approving a Solana ETF now would signal tacit endorsement of a blockchain ecosystem marred by fraud and instability, potentially drawing in retail investors unaware of these risks. The article reports that Solana’s price has already begun to decline as trust erodes, with assets flowing out of the ecosystem. Historical precedents, such as the overstated $4 billion in Solana DeFi value in 2022 due to rehypothecation, reinforce a pattern of deceptive practices that regulators cannot ignore. Until Solana demonstrates robust mechanisms to prevent insider trading, market rigging, and systemic grift—as evidenced by the Kelsier scandal—its market lacks the maturity and reliability required for an ETF. I respectfully request that the SEC consider the following points in its deliberation: Evidence of Insider Trading: The Kelsier scandal demonstrates clear misuse of privileged information, with Hayden Davis admitting to sniping his own launches, undermining fair market access. Systemic Risks: The involvement of Meteora and Jupiter suggests deeper structural flaws in Solana’s ecosystem, compromising its integrity as an investment vehicle. Investor Protection: The prevalence of memecoin speculation and liquidity manipulation poses unacceptable risks to retail investors, who would be primary ETF participants. Regulatory Precedent: Approving an ETF amid such turmoil could set a dangerous precedent, weakening the SEC’s commitment to safeguarding markets from fraud. In conclusion, the Solana ecosystem, as currently constituted, does not meet the standards of transparency, fairness, and stability necessary for an SEC-approved ETF. The Kelsier scandal is a stark warning of unresolved issues that could precipitate further losses and erode public trust in both cryptocurrency and regulated financial products. I urge the SEC to deny any Solana ETF applications until these concerns are comprehensively addressed through independent audits, enhanced governance, and demonstrable reforms. Thank you for your attention to this matter and for your ongoing efforts to protect investors. link to article: https://lex.substack.com/p/analysis-is-kelsiers-200mm-insider