Morgan Stanley Seeks SEC Approval for In-House Spot Bitcoin, Ether and Solana Funds

Morgan Stanley is seeking U.S. approval to launch a suite of cryptocurrency funds that would hold bitcoin, ether and solana directly—a move that would make it the first major U.S. bank to sponsor its own spot crypto exchange-traded products.

Filings outline three spot crypto trusts

In registration statements filed Jan. 6 and 7 with the Securities and Exchange Commission, Morgan Stanley Investment Management detailed plans for three Delaware statutory trusts:

• Morgan Stanley Bitcoin Trust
• Morgan Stanley Ethereum Trust
• Morgan Stanley Solana Trust

The products would issue shares designed to trade on a U.S. stock exchange and aim to mirror the price of the underlying digital assets, minus fees and expenses.

From distributor to issuer

The filings mark a shift for the New York-based bank, which until now has largely steered clients into third-party crypto funds and exchange-traded funds run by asset managers such as BlackRock, Fidelity and Grayscale. By moving from distributor to issuer, Morgan Stanley is looking to capture fee revenue and brand recognition in a market that has moved from the fringe of finance to a mainstream offering in brokerage and retirement accounts.

In a brief announcement describing the first two products, the firm said, “Morgan Stanley Investment Management (MSIM) announced today that it has filed initial registration statements with the Securities and Exchange Commission (SEC) for two new exchange-traded products (ETPs). Morgan Stanley Bitcoin Trust and Morgan Stanley Solana Trust are pending regulatory approval and would be passive investment vehicles that seek to track the performance of the price of the relevant cryptocurrency.”

The registration statements have not yet been declared effective, and the bank noted that “these securities may not be sold, nor may offers to buy be accepted prior to the time the respective registration statements become effective.”

Custody, structure and investor protections

All three trusts would hold the underlying cryptocurrencies on a “fully backed” basis, according to the filings, using one or more regulated digital-asset custodians.

The trusts are not mutual funds and will not be registered under the Investment Company Act of 1940, meaning they will not offer the protections or oversight that apply to traditional open-end funds. The documents also state the products will not be treated as commodity pools and that the sponsor will not act as an investment adviser to the trusts under the Investment Advisers Act.

How the trusts would work

Bitcoin: spot exposure with in-kind and cash creation

The Bitcoin trust would hold bitcoin directly and calculate net asset value once a day based on a benchmark price derived from trading on major bitcoin platforms. Authorized participants would be able to create and redeem large blocks of shares, either by delivering bitcoin in kind or by using cash that the trust converts into bitcoin through a trading counterparty.

Ether and Solana: staking-enabled structures

The Ethereum and Solana products go further by incorporating staking, a yield-generating activity unique to proof-of-stake blockchains. Both filings say each trust’s objective is not only to track the market price of ether or solana, but also to “reflect rewards from staking a portion of the Trust’s” holdings.

Under the proposed structure, Morgan Stanley’s sponsor entity would appoint one or more third-party staking service providers to run validator operations on the Ethereum and Solana networks. The custodians would retain control of private keys, and the staking providers would not be able to move assets or decide how much to stake. Staking rewards, if earned, would accrue to the trust and be reflected in its net asset value.

The documents emphasize staking income is not guaranteed and outline risks including validator penalties, or “slashing,” protocol changes, network outages and unbonding periods during which staked assets cannot be withdrawn or sold. The Solana prospectus cites the network’s past outages as a specific operational risk.

Fees left blank—for now

As with many crypto exchange-traded products, fees would be charged in kind. Each trust would pay a single “Sponsor Fee,” calculated as a percentage of assets and taken out of the cryptocurrency it holds—bitcoin for the Bitcoin trust, ether for the Ethereum trust and solana for the Solana trust.

The exact fee levels have not yet been set and are left blank in the initial filings. The sponsor would use that fee to cover operating expenses such as custody, administration and listing costs.

A crowded market with rising regulatory acceptance

The filings arrive in a fast-evolving market. Since the SEC approved the first U.S. spot bitcoin ETFs in early 2024, products from iShares, Fidelity, ARK 21Shares and others have attracted tens of billions of dollars in assets, with management fees settling around 0.19% to 0.25% for the largest funds. Spot ether ETFs followed, and in the past year some issuers—led by Grayscale—have launched or proposed staking-enabled ether funds that delegate a portion of holdings to validators and pass rewards back to investors.

Solana is newer territory but has moved quickly. Bitwise launched a spot Solana ETF in 2025 using an emergency approval path during a regulatory shutdown, spurring rivals to prepare their own offerings. Morgan Stanley’s Solana trust would be one of the first Solana vehicles backed by a large universal bank with a dominant wealth management arm.

According to Reuters, Morgan Stanley is the first major U.S. bank to seek regulatory approval for exchange-traded products that hold bitcoin and solana directly, a step that comes after years in which large lenders limited their crypto involvement to custody, research and narrow access for wealthy clients.

Matt Hougan, chief investment officer at crypto asset manager Bitwise, told industry publication Coinspeaker that Morgan Stanley’s move was “pretty remarkable,” noting that most of the bank’s existing ETFs sit under acquired brands such as Calvert and Parametric. The new crypto trusts would be only the third, fourth and fifth funds to carry the Morgan Stanley name, underscoring their prominence in the firm’s product lineup.

The new products also reflect a regulatory climate that has grown more accommodating to digital assets under the current administration. The SEC has allowed in-kind creation and redemption of crypto ETP shares, aligning them more closely with commodity ETFs, and has signaled greater openness to staking inside registered products after earlier requiring issuers to strip out staking from ether ETF proposals. The Office of the Comptroller of the Currency previously clarified that banks can act as intermediaries in certain crypto activities, including custody and payment services.

What approval could mean

Even with those shifts, the filings underscore that regulators still view crypto-linked securities as high risk. All three prospectuses warn in bold language that the shares are speculative, that the price of bitcoin, ether or solana could fall rapidly or become worthless, and that investors could lose their entire investment. They also flag legal uncertainty over how federal agencies classify some digital assets and how the Internal Revenue Service will treat staking rewards for tax purposes.

If the SEC approves the registration statements and the products begin trading, Morgan Stanley advisers would gain in-house options to offer clients who want crypto exposure in brokerage and retirement accounts. That could draw assets away from rival issuers’ funds and potentially increase the share of bitcoin, ether and solana held through regulated vehicles rather than on crypto exchanges.

It would also deepen the entanglement between traditional finance and public blockchains. By sponsoring staking-enabled Ethereum and Solana trusts, Morgan Stanley and its chosen custodians and service providers would help validate transactions and secure those networks, even as end investors access them through standard brokerage tickets. How much influence large financial institutions ultimately gain over those ecosystems—and how regulators respond if the political winds change—may not be clear until long after these products, if approved, begin trading on U.S. exchanges.