Morgan Stanley filed an amended registration statement on May 20 for its proposed Solana Trust, adding detailed staking provisions, dual-custodian arrangements, and operational parameters that advance the product toward potential launch on NYSE Arca under the ticker MSOL. The updated filing represents the most comprehensive Solana ETF structure submitted to date by a major Wall Street institution, reflecting the intensifying competition to bring regulated altcoin exposure to US investors.

Staking Provisions and Yield Structure

The amended filing permits the trust to stake up to 100 percent of its SOL holdings, subject to liquidity requirements, regulatory constraints, and redemption obligations. Staking will be conducted through third-party providers selected by the custodians or approved by the sponsor, with custodians retaining control of private keys at all times. Staking rewards will be distributed to shareholders on a monthly basis when practical, with a minimum quarterly distribution schedule as a fallback.

The inclusion of staking distinguishes the Morgan Stanley proposal from earlier spot crypto ETF structures that held assets passively. By enabling yield generation through network validation, the trust offers investors economic exposure to both SOL price appreciation and staking rewards, a feature that could prove decisive in attracting capital to the product over competing offerings that lack this capability.

Dual-Custodian Architecture

The filing designates BNY Mellon and Coinbase Custody Trust Company as primary custodians, with CSC Delaware Trust Company and AGS Trustees Limited serving as trustees. The sponsor retains discretion to divide assets between custody providers, a risk management approach that reduces single-point-of-failure exposure. Creation and redemption baskets are set at 10,000 shares, with the trust supporting both cash and in-kind processes. The initial seed investment comprises 50,000 shares with approximately one million dollars in proceeds.

The benchmark for net asset value calculations will be the CoinDesk Solana Benchmark at the 4 p.m. New York settlement rate. The trust will pursue a passive investment strategy, explicitly excluding leverage, derivatives, and speculative trading from its mandate.

Competitive Landscape for Solana ETFs

Morgan Stanley’s amended filing enters a crowded field. Multiple asset managers have submitted Solana ETF applications to the SEC, though none have received approval. The regulatory environment has shifted meaningfully since the approval of spot Bitcoin and Ethereum ETFs, with the SEC signaling greater openness to digital asset products under its current leadership. XRP ETFs have already outpaced Solana-linked products in cumulative inflows, according to recent data, suggesting that regulatory clarity and institutional familiarity remain significant factors in product adoption beyond Bitcoin and Ethereum.

Risks and Counterarguments

SEC approval remains uncertain, and the timeline for a decision on the Morgan Stanley filing is unclear. The inclusion of staking introduces additional regulatory complexity, as the SEC has historically scrutinized staking arrangements for potential securities law implications. Solana’s classification under US securities law has not been definitively resolved, and an adverse determination could delay or prevent product approval. Furthermore, the competitive dynamics of the Solana ETF market mean that even if approved, the Morgan Stanley trust would face pressure on management fees and distribution from rival products, potentially compressing the economic value of first-mover positioning.

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