SEC Company Response from Bitwise Solana Staking ETF (BSOL) — Jul 31, 2025
Bitwise Solana Staking ETF
Date: July 31, 2025 · CIK: 0002045872 · Accession: 0001213900-25-070064
AI Filing Summary & Sentiment
File numbers found in text: 333-283391
Letter
Via EDGAR Correspondence United States Securities and Exchange Commission Division of Corporation Finance Office of Crypto Assets 100 F Street, N.E. Washington, D.C. 20549 Re: Bitwise Solana ETF File No. 333-283391
Dear Ms. Tillan, Mr. Brunhofer, Mr. Lin and Mr. Dobbie:
This letter responds to your comments regarding the registration statement filed on Form S-1 for the Bitwise Solana ETF (the “Trust”) with the Staff of the Securities and Exchange Commission (the “Staff”) on June 13, 2025 (the “Registration Statement”). Capitalized terms used herein, but not otherwise defined, have the meanings ascribed to them in the Registration Statement.
Comment 1 – General
Please provide us a copy of your fact sheet for our review.
Response to Comment 1
The Registrant will provide the fact sheet in the future under separate cover.
July 31, 2025
Page 2
Comment 2 – Prospectus Summary – Overview of the Trust, page 1
We note your disclosure that “one or more” of the Trust Solana Accounts, designated as “Trust Staking Account(s),” permits the Solana held therein to be staked in accordance with the Trust’s staking policy. Please revise to provide a materially complete description of the Trust’s staking policy, including disclosure of the percentage of the Trust’s Solana to be staked.
Response to Comment 2
The Sponsor is still in the process of making final determinations regarding the operation of the Trust’s staking program as it remains attentive to potential developments in regulatory clarity. The operation of the staking program may be impacted by the “generic listing standards” that the Securities and Exchange Commission’s Division of Trading and Markets are thought to be proposing in the near future. Furthermore, the operation of the Trust’s staking program is heavily influenced by the activities that a Trust may undertake and maintain its status as a grantor trust under federal tax laws. The Sponsor has received indications that in the near future further clarity may emerge from the U.S. Department of the Treasury or pursuant to an Executive Order issued by the President of the United States regarding such activities.
Nevertheless, the Sponsor intends to stake the entirety of the Trust’s Solana. The Sponsor intends to meet redemption requests on a “T+2” basis, meaning that the Trust will make redemption distributions on the second business day following a properly submitted and accepted Redemption Order. This is designed to align with the “cooldown period” on the Solana Network, which is the period of time it takes for staked Solana to become fully liquid and transferable following an un-stake request. In general, the cooldown period on the Solana Network is expected to be 48 hours or less. When the Trust receives a Redemption Order, the Sponsor will cause an un-stake request to be submitted for an amount of staked Solana sufficient to satisfy the Redemption Order. Once the cooldown period is complete, the Sponsor, on behalf of the Trust, will have complete control over the Solana, including the ability to directly distribute the Solana in connection with an In-Kind Redemption Order or sell it for cash in connection with a Cash Redemption Order.
Comment 3 – Prospectus Summary – Overview of the Trust, page 1
You state that the Trust’s investment objective is to seek to provide exposure to the value of Solana held by the Trust, less the expenses of the Trust’s operations and other liabilities. Please revise to clarify whether your plans to earn rewards by staking a portion of your Solana are part of your investment objective.
Response to Comment 3
Pursuant to the Staff’s comment, the Trust’s investment objective has been revised as set forth below.
The Trust’s primary investment objective is to seek to provide exposure to the value of Solana held by the Trust, less the expenses of the Trust’s operations and other liabilities. The Trust’s secondary investment objective is to seek to earn staking rewards.
July 31, 2025
Page 3
Comment 4 – Prospectus Summary – Solana and the Solana Network, page 1
Please revise to disclose here the market capitalization of Solana. In addition, please provide quantitative disclosure here and in the first risk factor on page 11 regarding the historic volatility of the price of Solana.
Response to Comment 4
Pursuant to the Staff’s comment, the following disclosure has been added to the Prospectus Summary.
As of July 28, 2025, Solana had a market capitalization of $100,344,506,829, according to CoinGecko.
Additionally, the referenced risk disclosure has been revised as set forth below.
Solana has exhibited a historical annualized volatility of 121.67% and maximum annual price decrease of 95.34%.
Comment 5 – Prospectus Summary – The Trust’s Investment Objective and Strategies, page 5
Please revise your disclosures throughout to clarify whether the Trust will receive staking rewards in the form of additional Solana and/or cash. As examples only, we note the following:
● your disclosure on page 2 that “[a]s consideration for participating in staking activities, the Trust will receive a portion of the reward generated from such participation in the form of additional Solana...” (emphasis added);
● your disclosure on page 3 that the “Trust will receive a portion of the staking rewards related to [staking] activity, denominated in additional Solana or paid in cash” (emphasis added);
● your disclosure on page 108 that “[d]eposits of cash proceeds received by the Trust... from staking rewards will be used to acquire Solana” (emphasis added); and
● your disclosure on page 125 that, “If the Trust were to receive staking rewards, likely in the form of additional Solana, any such staking rewards received by the Trust would be reportable to Shareholders as taxable income under current IRS guidance” (emphasis added).
Please revise your disclosure throughout for clarity and consistency.
Response to Comment 5
The referenced disclosure has been revised to clarify that the Trust currently intends to solely earn staking rewards in the form of additional Solana.
July 31, 2025
Page 4
Comment 6 – Prospectus Summary – Purchases and Sales of Solana, page 3
We note your disclosure in the last paragraph on page 3 that purchases and sales of the Trust’s Solana may be facilitated through the Prime Execution Agent, an affiliate of the Solana Custodian. Please revise in an appropriate section of the prospectus to describe the potential conflicts of interest associated with such an arrangement and the impact it may have on price.
Response to Comment 6
The Registrant respectfully declines to add the requested disclosure in the Prospectus Summary. The Trust intends to do substantially all of its acquisition and divestment of Solana pursuant to In-Kind Creations and In-Kind Redemptions and, when an Authorized Participant effectuates a Cash Creation or Cash Redemption, through the Trust Directed Trade Model, as is disclosed throughout the Registration Statement. It is considered very unlikely that the Trust will purchase or sell Solana pursuant to the Agent Execution Model. Accordingly, the Registrant respectfully asserts that the inclusion of such disclosure in the section of the Registration Statement entitled “Material Contracts – Prime Execution Agreement,” where it currently exists (reproduced below), is more appropriate.
The Prime Execution Agreement provides that the Prime Execution Agent is subject to certain conflicts of interest, including: (i) the Trust’s orders may be routed to the Prime Execution Agent’s own execution venue where the Trust’s orders may be executed against other customers of the Prime Execution Agent or with the Coinbase acting as principal, (ii) the beneficial identity of the counterparty purchaser or seller with respect to the Trust’s orders may be unknown and therefore may inadvertently be another client of the Prime Execution Agent, (iii) the Prime Execution Agent does not engage in front-running, but is aware of the Trust’s orders or imminent orders and may execute a trade for its own inventory (or the account of an affiliate) while in possession of that knowledge and (iv) the Prime Execution Agent may act in a principal capacity with respect to certain orders. As a result of these and other conflicts, when acting as principal, the Prime Execution Agent may have an incentive to favor its own interests and the interests of its affiliates over the Trust’s interests.
July 31, 2025
Page 5
Comment 7 – Prospectus Summary – The Trust’s Fees and Expenses, page 5
We note your disclosure on page 6 that transfer fees with respect to on-chain transfers to and from a Trust Solana Account to a Solana Trading Counterparty, an Authorized Participant or an Authorized Participant Designee will be paid by the Solana Custodian. Please revise to clarify whether the Solana Custodian will pay such transfer fees using the Trust’s assets.
Response to Comment 7
Pursuant to the Staff’s comment, the referenced disclosure has been revised to clarify that the Solana Custodian will not pay such transfer fees using the Trust’s assets through the inclusion of the disclosure set forth below.
The Solana Custodian will not pay such transfer fees using Trust assets.
Comment 8 – Prospectus Summary – The Trust’s Fees and Expenses, page 5
We note your disclosure on pages 6 and 86 that:
● the Trust is not responsible for paying any fees or costs associated with the transfer of Solana to the Sponsor; and
● “[t]he Trust may incur certain extraordinary, non-recurring expenses that are not assumed by the Sponsor, including, but not limited to,... Solana Network fees.”
Please revise to clarify when the Trust is responsible for paying Solana Network fees.
Response to Comment 8
Pursuant to the Staff’s comment, the referenced disclosure under the second bullet has been revised to clarify that the Trust is not responsible for paying Solana Network transfer fees.
July 31, 2025
Page 6
Comment 9 – Risk Factors – Solana is a relatively new technological innovation with a limited operating history, page 19
To provide context for this risk, please specifically state how long Solana has been traded, and how long it has been traded in the United States.
Response to Comment 9
Pursuant to the Staff’s comment, the referenced risk factor has been revised to include the following disclosure.
Solana began trading in April 2020 and in the United States in September 2020.
Comment 10 – Risk Factors – The Solana Network could be vulnerable to attacks..., page 29
Please expand this risk factor to discuss any risks from other potential forms of attack against the Solana Network, including, for example, “the significant disruption, later attributed to a type of denial of service attack,” that the Solana Network experienced on September 14, 2021, as disclosed on page 74 under “Forms of Attack Against the Solana Network.”
Response to Comment 10
Pursuant to the Staff’s comment, the Registration Statement was revised to include the following as the second risk factor in the section entitled Risk Factors – Risks Associated with Solana and the Solana Network” to highlight not only the September 14, 2021 outage but other known outages as well.
Solana is a relatively new technological innovation with a limited operating history. The Solana Network may not function as intended, which could have an adverse impact on the value of Solana therefore the value of Shares.
The Solana Protocol was conceived in 2017 and serves as the underlying architecture and rules pursuant to which the Solana Network operates. Solana began trading in April 2020 and in the United States in September 2020. One notable element of the Solana Protocol was the introduction of Proof-of-History (“PoH”) timestamping mechanism. PoH is a timestamping mechanism that automatically orders on-chain transactions by creating a historical record that proves an event has occurred at a specific moment in time. PoH is intended to provide a transaction processing speed and capacity advantage over other blockchain networks like the Bitcoin network and the Ethereum network, which rely on sequential production of blocks and can lead to delays caused by validator confirmations.
July 31, 2025
Page 7
However, PoH is a relatively new blockchain technology that is not widely used and may not function as intended. For example, it may require more specialized equipment to participate in the network and fail to attract a significant number of users. In addition, there may be flaws in the cryptography underlying PoH specifically or the Solana Network generally, including flaws that affect functionality of the Solana Network, the proof-of-stake consensus algorithm, a particular client software implementation, or a user’s wallet software, or make the network vulnerable to attack.
The Solana Network has suffered network-level outage incidents over the past five years. For example, in 2020, the Solana Network experienced an outage attributed to a bug in the block propagation mechanism, and was offline for at least six hours. On September 14, 2021, the Solana Network experienced a significant disruption, later attributed to a type of denial of service attack, and was offline for 17 hours, only returning to full functionality 24 hours later. During the restart, a second integer overflow bug was discovered and patched. In January 2022, during a time of high network congestion, the Solana Network experienced degraded performance and partial outages. The disruption was attributed to bots spamming excessive duplicate transactions, significantly reducing network capacity. Blocks took longer than expected to process, leading to transaction success rates dropping by as much as seventy (70) percent. In April 2022, the Solana Network experienced an unprecedented surge in transaction requests, attributed to bots trying to secure newly minted NFTs through the Metaplex Candy Machine program. This minting mechanism operated on a first-come, first-served basis, creating a strong economic incentive to flood the network with transactions and win the mint. As transaction volume skyrocketed, validators ran out of memory and crashed, ultimately stalling consensus. Insufficient voting throughput prevented the finalization of earlier blocks, preventing abandoned forks from being cleaned up. As a result, validators became overwhelmed by the sheer number of forks they had to evaluate, exceeding their capacity even after restarts and requiring manual intervention to restore the network. The Solana Network was offline for at least eight (8) hours. In June 2022, the Solana Network experienced a bug with so-called “durable nonce” transactions leading to consensus failures. The Solana Network was offline for at least two and a half hours. In September 2022, the Solana Network experienced a bug attributed to validators erroneously producing duplicate blocks at the same block height. The Solana Network was offline for at least eight and a half
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CORRESP
1
filename1.htm
Richard Coyle
Partner
Chapman and Cutler LLP
320 South Canal Street, 27th Floor
Chicago, Illinois 60606
T 312.845.3724
rcoyle@chapman.com
July 31, 2025
Via EDGAR Correspondence
United States Securities and Exchange Commission
Division of Corporation Finance
Office of Crypto Assets
100 F Street, N.E.
Washington, D.C. 20549
Re:
Bitwise Solana ETF
File No. 333-283391
Dear Ms. Tillan, Mr. Brunhofer, Mr. Lin and Mr. Dobbie:
This letter responds to your
comments regarding the registration statement filed on Form S-1 for the Bitwise Solana ETF (the “Trust”) with
the Staff of the Securities and Exchange Commission (the “Staff”) on June 13, 2025 (the “Registration Statement”).
Capitalized terms used herein, but not otherwise defined, have the meanings ascribed to them in the Registration Statement.
Comment 1 – General
Please provide us a copy of
your fact sheet for our review.
Response to Comment 1
The Registrant will provide
the fact sheet in the future under separate cover.
July 31, 2025
Page 2
Comment 2 – Prospectus
Summary – Overview of the Trust, page 1
We note your disclosure that
“one or more” of the Trust Solana Accounts, designated as “Trust Staking Account(s),” permits the Solana held
therein to be staked in accordance with the Trust’s staking policy. Please revise to provide a materially complete description of
the Trust’s staking policy, including disclosure of the percentage of the Trust’s Solana to be staked.
Response to Comment 2
The Sponsor is still in the
process of making final determinations regarding the operation of the Trust’s staking program as it remains attentive to potential
developments in regulatory clarity. The operation of the staking program may be impacted by the “generic listing standards”
that the Securities and Exchange Commission’s Division of Trading and Markets are thought to be proposing in the near future. Furthermore,
the operation of the Trust’s staking program is heavily influenced by the activities that a Trust may undertake and maintain its
status as a grantor trust under federal tax laws. The Sponsor has received indications that in the near future further clarity may emerge
from the U.S. Department of the Treasury or pursuant to an Executive Order issued by the President of the United States regarding such
activities.
Nevertheless, the Sponsor
intends to stake the entirety of the Trust’s Solana. The Sponsor intends to meet redemption requests on a “T+2” basis,
meaning that the Trust will make redemption distributions on the second business day following a properly submitted and accepted Redemption
Order. This is designed to align with the “cooldown period” on the Solana Network, which is the period of time it takes for
staked Solana to become fully liquid and transferable following an un-stake request. In general, the cooldown period on the Solana Network
is expected to be 48 hours or less. When the Trust receives a Redemption Order, the Sponsor will cause an un-stake request to be submitted
for an amount of staked Solana sufficient to satisfy the Redemption Order. Once the cooldown period is complete, the Sponsor, on behalf
of the Trust, will have complete control over the Solana, including the ability to directly distribute the Solana in connection with an
In-Kind Redemption Order or sell it for cash in connection with a Cash Redemption Order.
Comment 3 – Prospectus
Summary – Overview of the Trust, page 1
You state that the Trust’s
investment objective is to seek to provide exposure to the value of Solana held by the Trust, less the expenses of the Trust’s operations
and other liabilities. Please revise to clarify whether your plans to earn rewards by staking a portion of your Solana are part of your
investment objective.
Response to Comment 3
Pursuant to the Staff’s
comment, the Trust’s investment objective has been revised as set forth below.
The Trust’s primary investment objective
is to seek to provide exposure to the value of Solana held by the Trust, less the expenses of the Trust’s operations and other liabilities.
The Trust’s secondary investment objective is to seek to earn staking rewards.
July 31, 2025
Page 3
Comment 4 – Prospectus
Summary – Solana and the Solana Network, page 1
Please revise to disclose
here the market capitalization of Solana. In addition, please provide quantitative disclosure here and in the first risk factor on page
11 regarding the historic volatility of the price of Solana.
Response to Comment 4
Pursuant to the Staff’s
comment, the following disclosure has been added to the Prospectus Summary.
As of July 28, 2025, Solana had a market capitalization
of $100,344,506,829, according to CoinGecko.
Additionally, the referenced
risk disclosure has been revised as set forth below.
Solana has exhibited a historical annualized
volatility of 121.67% and maximum annual price decrease of 95.34%.
Comment 5 – Prospectus
Summary – The Trust’s Investment Objective and Strategies, page 5
Please revise your disclosures
throughout to clarify whether the Trust will receive staking rewards in the form of additional Solana and/or cash. As examples only, we
note the following:
● your
disclosure on page 2 that “[a]s consideration for participating in staking activities,
the Trust will receive a portion of the reward generated from such participation in the form
of additional Solana...” (emphasis added);
● your
disclosure on page 3 that the “Trust will receive a portion of the staking rewards
related to [staking] activity, denominated in additional Solana or paid in cash” (emphasis
added);
● your
disclosure on page 108 that “[d]eposits of cash proceeds received by the Trust... from
staking rewards will be used to acquire Solana” (emphasis added); and
● your
disclosure on page 125 that, “If the Trust were to receive staking rewards, likely
in the form of additional Solana, any such staking rewards received by the Trust would be
reportable to Shareholders as taxable income under current IRS guidance” (emphasis
added).
Please revise your disclosure
throughout for clarity and consistency.
Response to Comment 5
The referenced disclosure
has been revised to clarify that the Trust currently intends to solely earn staking rewards in the form of additional Solana.
July 31, 2025
Page 4
Comment 6 – Prospectus
Summary – Purchases and Sales of Solana, page 3
We note your disclosure in
the last paragraph on page 3 that purchases and sales of the Trust’s Solana may be facilitated through the Prime Execution Agent,
an affiliate of the Solana Custodian. Please revise in an appropriate section of the prospectus to describe the potential conflicts of
interest associated with such an arrangement and the impact it may have on price.
Response to Comment 6
The Registrant respectfully
declines to add the requested disclosure in the Prospectus Summary. The Trust intends to do substantially all of its acquisition and divestment
of Solana pursuant to In-Kind Creations and In-Kind Redemptions and, when an Authorized Participant effectuates a Cash Creation or Cash
Redemption, through the Trust Directed Trade Model, as is disclosed throughout the Registration Statement. It is considered very unlikely
that the Trust will purchase or sell Solana pursuant to the Agent Execution Model. Accordingly, the Registrant respectfully asserts that
the inclusion of such disclosure in the section of the Registration Statement entitled “Material Contracts – Prime Execution
Agreement,” where it currently exists (reproduced below), is more appropriate.
The Prime Execution Agreement provides that
the Prime Execution Agent is subject to certain conflicts of interest, including: (i) the Trust’s orders may be routed to the Prime
Execution Agent’s own execution venue where the Trust’s orders may be executed against other customers of the Prime Execution
Agent or with the Coinbase acting as principal, (ii) the beneficial identity of the counterparty purchaser or seller with respect to the
Trust’s orders may be unknown and therefore may inadvertently be another client of the Prime Execution Agent, (iii) the Prime Execution
Agent does not engage in front-running, but is aware of the Trust’s orders or imminent orders and may execute a trade for its own
inventory (or the account of an affiliate) while in possession of that knowledge and (iv) the Prime Execution Agent may act in a principal
capacity with respect to certain orders. As a result of these and other conflicts, when acting as principal, the Prime Execution Agent
may have an incentive to favor its own interests and the interests of its affiliates over the Trust’s interests.
July 31, 2025
Page 5
Comment 7 – Prospectus
Summary – The Trust’s Fees and Expenses, page 5
We note your disclosure on
page 6 that transfer fees with respect to on-chain transfers to and from a Trust Solana Account to a Solana Trading Counterparty, an Authorized
Participant or an Authorized Participant Designee will be paid by the Solana Custodian. Please revise to clarify whether the Solana Custodian
will pay such transfer fees using the Trust’s assets.
Response to Comment 7
Pursuant to the Staff’s
comment, the referenced disclosure has been revised to clarify that the Solana Custodian will not pay such transfer fees using the Trust’s
assets through the inclusion of the disclosure set forth below.
The Solana Custodian will not pay such transfer
fees using Trust assets.
Comment 8 – Prospectus
Summary – The Trust’s Fees and Expenses, page 5
We note your disclosure on
pages 6 and 86 that:
● the
Trust is not responsible for paying any fees or costs associated with the transfer of Solana
to the Sponsor; and
● “[t]he
Trust may incur certain extraordinary, non-recurring expenses that are not assumed by the
Sponsor, including, but not limited to,... Solana Network fees.”
Please revise to clarify when
the Trust is responsible for paying Solana Network fees.
Response to Comment 8
Pursuant to the Staff’s
comment, the referenced disclosure under the second bullet has been revised to clarify that the Trust is not responsible for paying Solana
Network transfer fees.
July 31, 2025
Page 6
Comment 9 – Risk
Factors – Solana is a relatively new technological innovation with a limited operating history, page 19
To provide context for this
risk, please specifically state how long Solana has been traded, and how long it has been traded in the United States.
Response to Comment 9
Pursuant to the Staff’s
comment, the referenced risk factor has been revised to include the following disclosure.
Solana began trading in April 2020 and in the
United States in September 2020.
Comment 10 – Risk
Factors – The Solana Network could be vulnerable to attacks..., page 29
Please expand this risk factor
to discuss any risks from other potential forms of attack against the Solana Network, including, for example, “the significant disruption,
later attributed to a type of denial of service attack,” that the Solana Network experienced on September 14, 2021, as disclosed
on page 74 under “Forms of Attack Against the Solana Network.”
Response to Comment 10
Pursuant to the Staff’s
comment, the Registration Statement was revised to include the following as the second risk factor in the section entitled Risk Factors
– Risks Associated with Solana and the Solana Network” to highlight not only the September 14, 2021 outage but other known
outages as well.
Solana is a relatively new technological
innovation with a limited operating history. The Solana Network may not function as intended, which could have an adverse impact on the
value of Solana therefore the value of Shares.
The Solana Protocol was conceived in 2017 and
serves as the underlying architecture and rules pursuant to which the Solana Network operates. Solana began trading in April 2020 and
in the United States in September 2020. One notable element of the Solana Protocol was the introduction of Proof-of-History (“PoH”)
timestamping mechanism. PoH is a timestamping mechanism that automatically orders on-chain transactions by creating a historical record
that proves an event has occurred at a specific moment in time. PoH is intended to provide a transaction processing speed and capacity
advantage over other blockchain networks like the Bitcoin network and the Ethereum network, which rely on sequential production of blocks
and can lead to delays caused by validator confirmations.
July 31, 2025
Page 7
However, PoH is a relatively new blockchain
technology that is not widely used and may not function as intended. For example, it may require more specialized equipment to participate
in the network and fail to attract a significant number of users. In addition, there may be flaws in the cryptography underlying PoH specifically
or the Solana Network generally, including flaws that affect functionality of the Solana Network, the proof-of-stake consensus algorithm,
a particular client software implementation, or a user’s wallet software, or make the network vulnerable to attack.
The Solana Network has suffered network-level
outage incidents over the past five years. For example, in 2020, the Solana Network experienced an outage attributed to a bug in the block
propagation mechanism, and was offline for at least six hours. On September 14, 2021, the Solana Network experienced a significant disruption,
later attributed to a type of denial of service attack, and was offline for 17 hours, only returning to full functionality 24 hours later.
During the restart, a second integer overflow bug was discovered and patched. In January 2022, during a time of high network congestion,
the Solana Network experienced degraded performance and partial outages. The disruption was attributed to bots spamming excessive duplicate
transactions, significantly reducing network capacity. Blocks took longer than expected to process, leading to transaction success rates
dropping by as much as seventy (70) percent. In April 2022, the Solana Network experienced an unprecedented surge in transaction requests,
attributed to bots trying to secure newly minted NFTs through the Metaplex Candy Machine program. This minting mechanism operated on a
first-come, first-served basis, creating a strong economic incentive to flood the network with transactions and win the mint. As transaction
volume skyrocketed, validators ran out of memory and crashed, ultimately stalling consensus. Insufficient voting throughput prevented
the finalization of earlier blocks, preventing abandoned forks from being cleaned up. As a result, validators became overwhelmed by the
sheer number of forks they had to evaluate, exceeding their capacity even after restarts and requiring manual intervention to restore
the network. The Solana Network was offline for at least eight (8) hours. In June 2022, the Solana Network experienced a bug with so-called
“durable nonce” transactions leading to consensus failures. The Solana Network was offline for at least two and a half hours.
In September 2022, the Solana Network experienced a bug attributed to validators erroneously producing duplicate blocks at the same block
height. The Solana Network was offline for at least eight and a half