Odaily Planet Daily News The U.S. Securities and Exchange Commission (SEC) issued a warning to REX Shares and Osprey Funds on Friday night, saying that their proposed pledged Ethereum and Solana ETF products may not meet the definition of "investment company" in the Investment Company Act and fail to meet the legal compliance requirements of ETFs.
The two companies previously submitted a registration statement, intending to create a fund through a C-type corporate structure, staking at least 50% of the assets for additional income. Bloomberg analyst James Seyffart said the proposal adopted "a number of clever legal and regulatory avoidance strategies."
The SEC pointed out in the letter that the registration statement took effect before some "unresolved issues" were released, which violated the procedure, and has asked the issuer to postpone its effectiveness. SEC Assistant Director Brent J. Fields said that if the problem is still not resolved, the SEC will consider enforcement or forced resubmission.
REX Financial General Counsel Greg Collett told Bloomberg that the company will not launch the product until it meets the SEC's requirements. It is worth noting that the spot Ethereum ETF has been online for trading since July last year, but the spot Solana ETF has not yet been approved, so the staking ETF faces double regulatory obstacles. (The Block)