- SEC Expresses Concerns about REX's Improper Filing of SOL and ETH Staking ETF.
- REX Representative Confirms Company is Ready to Address Issues Before Product Launch.
SEC Reconsiders Approval of REX-Osprey's SOL and ETH Staking ETF
The anticipated quick approval of the proposed Solana [SOL] and Ethereum [ETH] Staking ETF by REX-Osprey may be delayed after the U.S. Securities and Exchange Commission (SEC) raised legal issues related to the registration filing.
On May 30, REX-Osprey filed an application to provide Staking services for SOL and ETH ETFs under a different structure under the Investment Company Act of 1940 (40-Act), aiming to accelerate market launch.
Bloomberg ETF Analyst James Seyffart noted:
"Launch date unclear, but possibly in the coming weeks. This is a 40-Act fund with a special structure and does not go through the 19b-4 process."
However, the SEC responded that REX's filing was submitted incorrectly.
SEC Warns about REX's Staking Filing
In a letter to ETF Opportunities, the legal representative for REX, the SEC stated:
"We are concerned that the funds may have filed the wrong registration statement on Form N-1A and disclosures about the fund's status as an investment company may be misleading."
Notably, the typical ETF approval process involves a 19b-4 form under the Securities Exchange Act of 1934.
James Seyffart responded on social media:
"The SEC seems to believe these products do not qualify under section 6c-11 and therefore cannot be listed under this structure."
He also explained that Rule 6c-11 under the 1940 Act helps simplify the ETF registration and launch process.
Predictions for SOL and ETH Staking ETF Future
Nate Geraci from ETF Stores remains optimistic that the products will be approved this year:
"The crypto ETF market is always volatile. All issues can be resolved if the SEC approves the spot SOL ETF and allows Staking in both ETH and SOL ETFs. I believe this will happen this year."
Meanwhile, REX Financial's Chief Legal Officer, Greg Collett, affirmed that the company can address the SEC's questions about "investment company" status.
Last week, the SEC clarified that most Staking services like SOL and ETH are not considered securities provision, increasing the likelihood of approving Staking ETFs for these Tokens.
Currently, the market is focused on Grayscale's ETH ETF filing under the Securities Exchange Act of 1934, with the SEC's final decision deadline on June 1.
SOL and ETH Market Developments
At the time of reporting, ETH was trading around $2,400, up 35% in the last 30 trading days, with market sentiment at "greedy" levels.
Meanwhile, SOL is at $153, up 4% over the past month, with market sentiment remaining "neutral."
