This Investment Manager Just Filed to Launch Canada’s First Solana ETP

Investment management firm 3iQ has filed a preliminary prospectus with Canadian securities regulatory agencies, except Québec, to launch the country’s first Solana exchange-traded product (ETP).

If approved, the fund will become the first Solana ETP to be listed in North America, according to a tweet by 3iQ.

3iQ Files to Launch Solana ETP

The Solana Fund (QSOL) will offer investors exposure to Solana’s native cryptocurrency, SOL, without the technical complexity that comes with direct investment in the digital asset. This will give them an opportunity for long-term capital appreciation. 3iQ said there is an exclusive investment opportunity through the fund’s upcoming initial public offering (IPO). 

3iQ has also applied to list the Class A units of QSOL on the Toronto Stock Exchange, making the shares available for registered accounts in the country. The fund’s assets will be held in cold storage via a partnership between crypto exchange Coinbase and digital asset custodian Tetra Trust. 

It is worth noting that the Solana fund will stake SOL to earn rewards. 3iQ intends to reinvest the rewards after deducting applicable fees to enhance unitholders’ returns. 

Greg Benhaim, Executive Vice President of Product and Head of Trading at 3iQ, said: “As pioneers in digital asset investment management, we look forward to continuing our mission to deliver regulated investment vehicles – embodying the highest standards and working with best-in-class partners – for individual and institutional investors to efficiently access the growing crypto asset class.”

U.S. Could See Similar Filings

Commenting on 3iQ’s latest filing, Bloomberg exchange-traded fund (ETF) analyst James Seyyfart explained that if approved, QSOL would be a closed-end fund; hence, it would be similar to Grayscale’s trust products. Like Grayscale’s trust funds, the ETP could face extreme discounts and premiums to its underlying asset unless Canada’s closed-end funds have mechanisms to prevent such.

Seyffart insisted that Canadian regulators would not necessarily approve the product; however, 3iQ took the same approach with Bitcoin in 2019 before eventually launching ETFs.

Fellow Bloomberg ETF analyst Eric Balchunas was surprised that the United States had not seen similar filings for Solana ETPs. He predicted such moves could be like call options if U.S. presidential candidate Donald Trump won the upcoming elections and appointed a pro-crypto chairperson for the Securities and Exchange Commission.