Jito Labs leads SEC petition to approve Solana liquid staking tokens for ETPs

The leading validator and block builder, Jito Labs, led a petition to the SEC to approve Solana liquid staking tokens for exchange-traded products (ETP) and ETFs. The filing starts a new stage of using crypto in traditional finance, allowing in-kind compensation and passive income.

Jito Labs, along with Bitwise, Multicoin, VanEck, and Solana Institute, filed a petition to the US Securities and Exchange Commission (SEC) to allow the usage of Solana liquid staking tokens in ETF and ETP.

JUST IN: Jito Labs, Bitwise, Multicoin, VanEck, and Solana Institute urge the SEC to approve Liquid Staking Tokens in ETPs.

They say LSTs boost liquidity, resilience, and cut risk, pushing for greenlight in upcoming Solana ETFs under new SEC rules. pic.twitter.com/XdAixF7XqB

— Cryptopolitan (@CPOfficialtx) July 31, 2025

The organizations are advocating for the usage of liquid staking tokens (LSTs) as the main type of staking in ETP or ETF. Solana allows for regular SOL staking, but there is also liquid staking, which includes both passive income and a newly issued token for additional operations.

The filing urged to include liquid staking for eight products that filed S-1 forms with the SEC on June 13, 2025.

Jito Labs urges the spread of liquid staking tokens to ETP and possibly ETF

For now, only ETPs allow for staking, but the practice may spread to ETFs with additional requests. The SEC is also still exploring the legal side of staking, for both Ethereum and Solana ETFs, while fund issuers are pushing to include various forms of staking and in-kind compensation.

Jito Labs and its associates claimed LSTs are capital-efficient and low-risk, and can benefit ETP investors. So far, the SEC has not explicitly addressed LSTs on Solana or other networks, though there are general guidelines on proof-of-stake networks. LSTs can work as a proxy for direct staking, and the SEC is urged to consider the mechanism for Solana and other chains.

LSTs are most common on Ethereum and Solana, and are a tool to secure the network, while also putting idle tokens to work.

Requests for staking started in 2024

The initial ETF and ETP filings omitted the issue of staking, as they focused on BTC products. The inclusion of Ethereum and later Solana ETP filings raised the issue of staking. The first filings avoided the topic due to technical uncertainties, taxation issues, and the fear of pushing crypto innovation too quickly to mainstream investors.

Currently, Solana carries over $7.8B in value through its liquid staking tokens. Most of the tokens are issued by validators or other infrastructure projects on the Solana chain, among which JitoSOL is the leader.

One of the risks for LSTs is their relative volatility. While SOL traded at $177.75, LSTs ranged between $220 and $200. Jito Staked SOL (JITOSOL) traded at $218.57. Marinade’s token traded as high as $235.06. LSTs are often used in DeFi protocols and have varying price discovery mechanisms.

There is no clear standard for staking service, and each has relatively complex rules. The biggest risk for LSTs is ‘slashing’, where flawed validators can have their tokens confiscated. Therefore, some LST issuers are competing to offer safe or vetted services. Recently, Marinade Finance slashed and restaked 340,000 SOL, removing validators from its list. The process is not entirely detailed to mainstream finance regulators, and the SEC will have to research the conditions of staking and slashing.