SEC Rejects DeFi Development's Plan to Purchase $1 Billion in Solana

The U.S. Securities and Exchange Commission (SEC) has rejected DeFi Development’s proposal to issue $1 billion in securities to purchase Solana (SOL), citing the filing’s lack of required documentation. The company has submitted a request to withdraw its Form S-3 registration, committing to complete and resubmit it in the near future.

Despite this setback, DeFi Development has boldly invested millions of dollars in SOL over the past two months. However, to accumulate a large amount of SOL as planned, the company needs additional liquidity from the securities issuance—currently hindered by the SEC’s decision.

While many businesses are following the “Bitcoin strategy”—accumulating Bitcoin as a long-term reserve asset—DeFi Development has chosen a different route: investing in altcoins such as Ethereum, Solana, and XRP. Since April, the company has launched a plan to raise $1 billion through a securities issuance to buy SOL, aiming to execute the largest corporate purchase of Solana to date.

However, the SEC rejected the proposal due to a lack of internal control reports—a crucial requirement. In a recent announcement, DeFi Development stated:

We request to withdraw the registration along with all related documents. The company recognizes that we currently do not meet the criteria to use Form S-3 as required by the SEC.

This has temporarily prevented DeFi Development from using the securities issuance to fund its plan to buy SOL. Nevertheless, the company has self-funded millions of dollars in investments in SOL, with a total of $42 million raised as of April.

Additionally, DeFi Development is actively participating in SOL staking and collaborating with various partners to expand its related ecosystem, demonstrating its determination to build a strong position in this field.

To achieve its ambition of accumulating SOL on a large scale, DeFi Development needs approval from the SEC. This process began in April and lasted nearly two months before being rejected. The SEC’s “whistle” has temporarily interrupted the dream of becoming the “Strategy of Solana.”

While Bitcoin continues its strong growth, Solana is undergoing a price correction, although the prospect of an ETF could provide momentum for recovery. Currently, DeFi Development is facing a stalemate, unable to rise to become a “whale” of Solana as initially expected. However, with perseverance and a long-term plan, the company still has a chance to achieve remarkable success if it can overcome legal barriers.

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