SEC Rejects DeFi Firm’s $1 Billion Bid to Become ‘Solana’s MicroStrategy’

The SEC rejected DeFi Development’s attempt to offer $1 billion in securities to buy Solana, on account of missing paperwork. The firm has filed to withdraw its Form S-3, intending to refile in the future.

Nonetheless, DeFi Development has invested millions into SOL over the last two months, but it won’t be able to build a massive stockpile without more liquidity.

SEC Stifles Solana Plans

Over the last few months, a growing number of companies have been following in MicroStrategy’s footsteps, investing heavily in Bitcoin to secure long-term gains.

Some companies have taken the alternative route, and chose to build reserve assets with altcoins – most notably Ethereum, Solana, and XRP.

Today, the SEC rejected DeFi Development’s attempt to raise money for Solana purchases, citing paperwork errors:

“The Company hereby respectfully makes this application to withdraw the Registration Statement, together with all exhibits thereto. The Company is seeking withdrawal of the Registration Statement because…[it] understands that the Commission has determined that the Company does not meet the eligibility requirements for the use of Form S-3 at this time,” DeFi Development’s newest filing read.

DeFi Development has been working on this plan since April, filing with the SEC to sell $1 billion in securities for Solana purchases. If this proved successful, it’d become the largest corporate SOL holder by a substantial margin.

However, its first effort did not contain a mandatory internal controls report, causing the firm to withdraw this application.

In other words, the SEC has forbidden DeFi Development from funding these Solana purchases. To be clear, though, the company has already committed millions to SOL investment.

Like MicroStrategy, the firm needs substantial liquidity from stock sales to fund its pivot to Web3, but it raised $42 million for SOL purchases by April.

Since then, DeFi Development has taken a particular interest in SOL staking and partnered with several companies to enter this market.

The company won’t be able to accumulate a massive Solana stockpile until the SEC gives it the green light. The company started this process back in April, and as it seems, the Commission has deliberated on the proposal for nearly two months.

In other words, the company’s vision of becoming “Solana’s MicroStrategy” may have hit a speed bump. Bitcoin’s price is heating up, but Solana’s has been cooling down in recent days.

Still, it may gain momentum again, thanks to ETF hype. For now, DeFi Development is at an impasse and won’t be able to become a true Solana whale just yet.