SEC Pushes Back on Ethereum and Solana Staking ETF Plans

A fresh attempt to introduce staking-based ETFs in the U.S. has run into immediate friction with regulators.

REX Shares and Osprey Funds recently filed to launch ETFs that would not only invest in Ethereum and Solana but also stake a large portion of those assets to earn extra yield. However, the SEC has flagged the filings, questioning whether these products even qualify as ETFs under federal law.

The proposed funds use a C-corporation structure and aim to stake at least half of their holdings—an approach that blends elements of crypto finance with traditional ETF frameworks. While innovative, the SEC appears unconvinced. In a letter issued shortly after the registration went live, the agency expressed “unresolved questions” over whether the funds meet the definition of an investment company under the Investment Company Act of 1940.

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The SEC also asked the issuers to delay the launch and disclose prior communications, highlighting a deeper level of regulatory concern. REX Financial’s general counsel Greg Collett said they don’t plan to proceed until they’ve addressed the legal issues and gained the Commission’s approval.

Although Ethereum ETFs are already trading, Solana still lacks basic spot ETF approval in the U.S., meaning this product faces not one but two layers of regulatory review. Whether staking ETFs can find a path forward will likely hinge on how the SEC ultimately rules on both the structure and the assets involved.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.