SEC questions REX-Osprey’s launch of Ethereum and Solana collateralized ETFs

Mars Finance News: The U.S. Securities and Exchange Commission (SEC) warned REX Shares and Osprey Funds on Friday night that their proposed staking Ethereum and Solana ETF products may not meet the definition of an "investment company" under the Investment Company Act and fail to satisfy the legal compliance requirements for ETFs. The two companies previously submitted registration statements, intending to create funds through a C-corporation structure with at least 50% of assets used for staking to obtain additional returns. Bloomberg analyst James Seyffart said the proposal employed "multiple clever legal and regulatory evasion strategies". The SEC noted in its letter that the registration statement would take effect before some "unresolved issues" are resolved, violating procedures, and has requested issuers to postpone its effectiveness. SEC Assistant Director Brent J. Fields stated that if issues remain unresolved, the SEC will consider enforcement or mandatory resubmission. Greg Collett, REX Financial General Counsel, told Bloomberg that the company will not launch the product before meeting SEC requirements. Notably, spot Ethereum ETFs have been trading since last July, but spot Solana ETFs have not yet been approved, thus facing double regulatory obstacles. (The Block)