Upexi Disclosed Solana Insurance Gap After SEC Pressure
SEC staff pushed Upexi to spell out custody insurance limits, contract exit terms and liquidity constraints behind its Solana treasury strategy.
UPEXI, INC. disclosed that its custodians’ insurance could not fully cover a loss of its Solana holdings after the SEC pressed it to explain the protection behind its digital-asset treasury. The company subsequently added contract provisions showing when its custodians could terminate or suspend services, giving investors more specific information about both loss coverage and access to custody services. Those changes followed an August–September 2025 exchange.
The SEC’s insurance challenge followed Upexi’s initial description of multiple custodians and insurance protection. Staff demanded the custodians’ identities, policy limits and an explicit assessment of whether coverage would cover a full loss. Upexi named BitGo Trust Company as its primary custodian and reported approximately $253 million of treasury assets there against a stated $250 million policy covering loss, theft and misuse. Those amounts reflected the valuation used in its response.
Upexi identified Coinbase as its second custodian, used primarily to acquire digital assets. The insurance it described there covered cash, with a $250,000 limit; the company also held less than $6 million in SOL at Coinbase. Upexi expressly acknowledged that the policies were inadequate to cover a complete loss of its SOL. It said management reviewed balances to allocate holdings among custodians and was onboarding a third provider.
Staff then pressed beyond the insurance amounts. In its final supplied response, dated September 15, Upexi added the material terms of both custody agreements and said it had provided executed contracts, with portions redacted, alongside complete versions for the SEC. BitGo’s agreement ran for one year with successive annual renewals. It allowed termination on 30 days’ notice for a breach and suspension under circumstances including misuse of the account, changes in law, litigation or bankruptcy.
Coinbase’s agreement allowed either party to terminate at will. Upexi also described breach-related termination and suspension rights, as well as Coinbase’s ability to close an account inactive for more than a year. These details gave investors concrete service-continuity conditions to consider alongside Upexi’s custody safeguards: company-controlled accounts, multiple-person approvals for transfers and more than 98% of its SOL treasury held in cold wallets.
Access to the tokens had also drawn an earlier staff challenge. Upexi said approximately 95% of its SOL treasury was staked and that it targeted a similar or higher proportion. Staking committed tokens to support network validation and earn rewards; withdrawing them involved a deactivation period generally expected to last 48 hours or less. Upexi added that it could not guarantee regaining the ability to use the tokens in time to meet current obligations. It maintained liquid SOL and cash for those obligations, without specifying reserve amounts in the supplied response.
The SEC also required more detail about the company’s arrangement with GSR Strategies and its related-party connections. Upexi added an annual management fee of 1.75% of managed assets and a 20-year contract term. It described a two-thirds shareholder voting requirement for termination without cause and an early-termination fee provision with a $15 million minimum and a potentially higher fee based on historical management fees. The company added the arrangement to its related-person disclosures and corrected an earlier description of who controlled an affiliated shareholder’s shares.
Upexi’s revisions made the commitments behind its treasury strategy more concrete: custody services could end, staked tokens could take time to become available, and ending the management arrangement could carry substantial costs. The company supplied more detailed safeguards and contractual terms; its stated insurance protection still left a full loss of SOL uncovered at the valuation used in the responses.
Source: Upexi’s SEC correspondence dated August 29, September 5 and September 15, 2025, released September 16, 2026.