Compliance analysis of VanEck Solana ETN stake by asset management company

In the global landscape of digital assets, regulatory Compliance is rapidly becoming a key issue that every Web3 enterprise must face. VanEck is a globally leading asset management company headquartered in the United States, founded in 1955, and known for providing innovative investment solutions. VanEck's investment products cover multiple categories including stocks, fixed income, commodities, and alternative investments, with a recent focus on digital assets and blockchain technology. According to Aiying, the size of Cryptocurrency ETP in Europe has reached 2 billion euros, but the participation of institutional investors is low, with individual investors being the main participants. Many wealth management companies have not made relevant allocations.

VanEck's goal is to make it easier for investors to access these opportunities in asset classes by developing emerging markets and new financial instruments. Currently, VanEck has launched 12 Token-based Cryptocurrency ETPs in the European market. These ETPs include BTC and Ethereum ETNs (exchange-traded notes), as well as the recent launch of Solana exchange-traded notes (ETNs), which has quickly sparked widespread discussion within the industry - it not only involves innovation in investment opportunities, but also touches on a new level of Compliance for digital assets. Recently, VanEck announced that the Solana exchange-traded notes (ETN) launched in Europe have enabled stake functionality.

How did VanEck achieve this under the dual regulatory framework of Europe and Liechtenstein? This article will delve into the road of Compliance behind it, bringing thoughts and inspiration to practitioners in the Web3 industry.

1. VanEck's Solana ETN stake: The Way of Compliance That Is Simple but Not Simple

VanEck's Solana ETN provides investors with a way to earn stake rewards without directly holding Solana Tokens. The ETN uses a fully custodial stake mechanism, meaning all stake assets are managed by regulated custodians who have full control over the stake assets without involving any lending risks. As a result, investors do not need to participate in the actual stake process, and stake rewards will automatically reflect in the Token's equity, with rewards being fairly distributed based on the investor's holding period after deducting a 25% stake fee.

Such a design is attractive to investors who seek simplified operations and avoid direct management of encryption asset risks. Behind this simplified appearance are well-designed compliance arrangements and multi-level legal safeguards. VanEck emphasizes that it does not involve the use of derivatives, and all assets are stored in regulated custody banks, such as Bank Frick & Co. AG in Liechtenstein. As a licensed custodian, the bank is bound by Liechtenstein's Blockchain Act, further enhancing the security and compliance of investments.

2. Dual Regulation: The Showdown between Liechtenstein's 'Blockchain Act' and the European MiCA Proposal

When discussing the compliance of VanEck Solana ETN, it is necessary to mention two important regulatory frameworks: Liechtenstein's "Blockchain Act" and the European MiCA (Markets in Crypto-Assets Regulation). Liechtenstein is a member of the European Economic Area (EEA), and its "Blockchain Act" is one of the earliest comprehensive regulations for Blockchains and encryption assets in the world, aiming to establish a clear legal framework for Tokens and trusted technical service providers (such as custodians and exchanges) to ensure the security and transparency of the financial technology field.

The MiCA proposal represents the European Union's attempt to establish a unified regulatory standard for the entire encryption asset market. The introduction of MiCA aims to comprehensively regulate the issuance of cryptocurrencies and their trading platforms, ensuring investor protection and market transparency. In theory, as part of the EEA, Liechtenstein will comply with the requirements of MiCA. However, due to Liechtenstein's Blockchain Act, which was implemented before the MiCA proposal was formulated, local encryption companies in Liechtenstein have been provided with more flexible and specific regulatory guidance. Prior to the full implementation of MiCA, Liechtenstein's laws still provide compliance support for encryption activities.

The dual regulatory framework is both a challenge and an opportunity for companies like VanEck. On the one hand, the Blockchain Act provides specific legal protection for companies, enabling them to quickly start the stake business; on the other hand, with the gradual advancement of the MiCA bill, companies like VanEck need to dynamically adjust their Compliance strategy to comply with the newly established EU standards. This requires companies to find a balance between the two regulatory frameworks to ensure the Compliance and market competitiveness of their business.

III. Opportunities and Challenges for Compliance Consulting Firms: From Local Regulations to Global Frameworks

With the gradual implementation of the MiCA bill, countries like Liechtenstein will have to integrate between local regulations and new EU regulations. The future Compliance requirements will gradually shift from "understanding local regulations" to "achieving multi-level Compliance within a global framework." In addition, global Web3 enterprises operating in different jurisdictions need to face different legal environments and regulatory changes. Compliance service providers need to have a deep understanding of local laws and closely follow regional regulations (such as MiCA) to understand the potential impact on client business, in order to provide the best Compliance solutions for clients. Aiying will share more practical customer cases, continue to deepen regulatory analysis and Compliance guidance, and help enterprises expand their business in the global market in a Compliance and stable manner.