SEC's Concerns Over Ethereum, Solana Staking ETFs
The U.S. Securities and Exchange Commission has expressed concerns to ETF issuers REX Shares and Osprey Funds regarding their proposal for a new 'staking ETF' focused on Ethereum and Solana. The proposal might not align with the essential legal framework of an exchange-traded fund. REX Shares and Osprey Funds aim to launch C-corporation ETFs investing in Ethereum and Solana, planning to stake over half of the assets for additional yields. However, the SEC has highlighted potential legal and regulatory issues with their strategy. In a letter from SEC Associate Director Brent J. Fields, it was noted there are unresolved questions on whether the proposed ETFs meet the criteria under the Investment Company Act. The SEC has asked for a delay in the registration statement and insisted on making prior communications public for transparency. REX's General Counsel, Greg Collett, mentioned their confidence in addressing these concerns before launching. While Ethereum spot ETFs have been around since last July, Solana's spot ETF is pending approval, making the staking Solana ETF face multiple regulatory challenges.
FAQ
❓ What is the main issue the SEC has with the staking ETFs?
The SEC questions whether the proposed staking ETFs meet the legal definition of an investment company under the Investment Company Act.
❓ What are REX Shares and Osprey Funds planning?
They aim to create ETFs that invest in Ethereum and Solana and look to stake more than half of their assets for increased yield.
❓ Why is the Solana staking ETF facing more challenges?
Unlike Ethereum, a spot Solana ETF is yet to be approved, adding regulatory hurdles for its staking ETF.