3iQ Digital Asset Management is facing scrutiny over its marketing of The Solana Fund (QSOL) as North America’s premier Solana exchange-traded product (ETP). The fund, which has filed for an initial public offering of Class A and Class F units and aims to list on the Toronto Stock Exchange under the ticker “QSOL” and claims to offer investors exposure to Solana (SOL) and potential for long-term capital growth, including staking yields.
Eric Balchunas
Critics argue that 3iQ’s promotional tactics may mislead investors since the Solana Fund does not adhere to the traditional Solana ETF or ETP structure. Bloomberg’s Eric Balchunas highlighted that a genuine ETP must feature a daily creation/redemption process, a criterion not met by 3iQ’s offering. He even cautioned against leveraging the ETF label without meeting these structural standards, suggesting that such strategies capitalize on the popularity of ETFs while potentially misleading investors.
James Seyffart
James Seyffart, another Bloomberg analyst, voiced these concerns, noting historical instances where Canadian issuers initially launched closed-end funds (CEFs) with plans to convert them to ETFs later. He emphasized that clarity is crucial in marketing such funds, implying that current communications from 3iQ might need more transparency about the Solana Fund’s status and future intentions to ensure smooth crypto regulation.
In response, the crypto industry experts caution against prematurely labeling products as ETPs or ETFs, urging firms like 3iQ to wait until their offerings genuinely meet the criteria for these structured investment products. This ETF management underscores the importance of clear and accurate communication in the financial markets, particularly regarding innovative but potentially misleading financial investment vehicles like the Solana Fund.
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