SEC Questions Legitimacy of REX’s Crypto Staking ETFs
- SEC raises questions about REX’s ETF compliance.
- REX must address SEC concerns to launch funds.
- Crypto industry faces a significant regulatory hurdle.

The U.S. Securities and Exchange Commission (SEC) raised concerns on May 30, questioning REX Shares’ Ethereum and Solana staking ETFs’ adherence to federal securities laws in the United States.
The SEC’s inquiry into REX’s ETFs matters as it challenges the evolving crypto investment landscape amid recent market advancements.
REX Shares and Osprey Funds submitted proposals for Ethereum and Solana staking exchange-traded funds (ETFs), aiming for recognition under securities laws. The SEC’s concerns focus on whether these funds meet the definition of an investment company. REX’s innovative approach involves using 40-Act funds, bypassing traditional 19b-4 applications. This has led the SEC to express doubts regarding these funds’ validity as ETFs.
The SEC’s scrutiny affects key cryptocurrencies, Ethereum (ETH) and Solana (SOL), which are central to the proposed ETF operations. Immediate effects include heightened caution in the crypto market as similar innovations face potential delays. Financial implications involve increased regulatory scrutiny for innovative crypto products, affecting the momentum of new crypto investment technologies. The SEC’s position could shape future crypto ETF applications.
REX must address the SEC’s concerns, focusing on clarifying their ETFs’ status under the Investment Company Act. As market analysts predict eventual compromise, precedents show industry adjustments to regulatory feedback. The outcome may dictate future regulatory standards for crypto-focused ETF approaches.
“We think we can satisfy the Commission on the investment company question, and we don’t intend to launch the funds until we do that.”
— Grey Collett, General Counsel, REX Financial