SEC flags Solana and Ether staking ETFs over structure concerns

The US Securities and Exchange Commission (SEC) has raised concerns about the eligibility of Solana (CRYPTO:SOL) and Ether (CRYPTO:ETH) staking exchange-traded funds (ETFs) proposed by REX Financial and Osprey Funds, citing issues with their corporate structure.

In a letter dated May 30, the SEC questioned whether the funds, structured as C-corporations—a rare format for ETFs—meet the definition of an “investment company” under the Investment Company Act.

The regulator noted that disclosures regarding the funds’ status as investment companies could be “potentially misleading,” highlighting conflicts with Rule 6C-11, known as “the ETF rule,” which governs permissible ETF structures.

Despite this, analysts remain optimistic that the issuers and the SEC can resolve the issues.

“REX lawyers say they can work it out. Issuers are pushing the envelope hard in an effort to get first to market,” Bloomberg ETF analyst Eric Balchunas wrote on May 31.

The staking ETFs aim to give investors exposure to Solana and Ether while allowing them to earn staking rewards, a feature expected to attract fresh liquidity from traditional financial markets into crypto.

The SEC’s caution follows earlier guidance clarifying that crypto staking itself does not constitute a securities transaction, yet the agency continues to delay decisions on staking and altcoin ETFs.

“Almost all of these filings have final due dates in October. It is uncommon for ETF applications to be approved so early,” stated Bloomberg analyst James Seyffart, noting these delays are typical.

REX Financial’s general counsel, Greg Collett, said the firm intends to address the SEC’s concerns before launching the funds.

At the time of reporting, the Ethereum (ETH) price was $2,519.02 and the Solana (SOL) price was $157.64.