- REX Shares filed a prospectus for Solana and Ethereum staking ETFs using a unique C-corporation structure, bypassing usual ETF rules.
- ETFs plan to stake at least 50% of holdings, fulfilling investor demand for regulated crypto staking yield products.
- SEC delays on Grayscale’s crypto ETFs boost REX Shares’ alternative legal approach, potentially setting a new market precedent.
REX Shares has filed an effective prospectus for Solana (SOL) and Ethereum (ETH) staking ETFs in the United States, which adopted regulatory workarounds to bring these products to market. Analysts believe the ETFs could launch within weeks, marking a major milestone for crypto investments.
ETF analyst James Seyffart highlighted the unique structure of these funds, noting they are registered as C-corporations—a rare setup in the ETF industry. Seyffart emphasized that these aren’t conventional 19b-4 filings but instead 40-Act funds, using alternative legal routes to bypass regulatory obstacles effectively.
REX Shares Targets Ethereum, Solana Spot Exposure
Seyffart shared that REX Shares aims to gain spot exposure to Ethereum and Solana through Cayman-based subsidiaries. He described the structure as a “clever legal and regulatory workaround,” potentially allowing for a smoother SEC review. Such creativity could set a new precedent for crypto ETF strategies in the U.S. market.
The U.S. SEC recently clarified that staking via Proof-of-Stake protocols is not classified as a security. This regulatory clarity paved the way for REX Shares to pursue a staking-based ETF structure. According to analysts, this might help gain limited but important SEC acceptance for such crypto products.
Nate Geraci, President of ETF Store, took a “regulatory end-around,” praising the timing and design. He stated that both ETFs aim to stake at least 50% of their holdings in Ethereum and Solana. This feature fulfills a long-standing demand among investors seeking staking yield in regulated investment vehicles.
SEC Delays Grayscale’s Crypto ETF Approvals
The absence of staking capabilities in earlier Ether ETFs sparked criticism among industry executives. BlackRock’s Robbie Mitchnick, for instance, hailed their Ether ETF as a “tremendous success” but admitted it remains “less perfect” without staking—a feature many believe is essential to mirror crypto’s true yield potential.
REX Shares’ timing may also relate to ongoing delays in other crypto ETF applications. Grayscale tries to reclassify its spot ETFs from its Avalanche and Cardano trusts but the SEC has postponed its decisions on the matter, thus the applicants await official decisions and influence innovation through the use of other regulatory channels.
Earlier this year, Grayscale’s Cardano ETF proposal made people believe it could be a reality after the SEC’s recognition it got in February. However, the occurrence of a new comment period that is here now proves that the proposal is not yet approved. The delay makes the situation become uncertain highlighting the challenge crypto ETFs face within the U.S. regulatory environment.
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