The US Securities and Exchange Commission (SEC) has warned REX Shares and Osprey Funds that their proposed staking ETF may not meet the basic legal definition of an exchange-traded fund, raising concerns about potential enforcement or a forced refiling. The two companies had filed to create C-corporation ETFs investing in Ethereum and Solana with a staking strategy to generate additional yield.
The SEC has expressed unresolved questions about whether the proposed funds would meet the definition of “investment company” under the Investment Company Act. As a result, the agency asked the issuers to delay the effectiveness of their registration statement, which went into effect on Friday. The SEC also requested that REX Shares and Osprey Funds make a prior email correspondence public for potential investors to review.
“We think we can satisfy the SEC on the investment company question, and we don’t intend to launch the funds until we do that,” said Greg Collett, general counsel at REX Financial. The staking Solana ETF is considered a high-risk product with two regulatory hurdles to overcome: approval of a spot Solana ETF and compliance with the SEC’s concerns.
The development comes hours after the registration statement technically went live, highlighting the uncertainty surrounding the proposed funds’ launch.
Source: https://www.theblock.co/post/356469/sec-casts-doubt-on-rex%E2%80%91osprey-bid-to-launch-staking-ethereum-solana-etfs