Nikolas Sargeant
The U.S. Securities and Exchange Commission (SEC) has cast doubt on Rex Shares and Osprey Funds' proposal to launch exchange-traded funds (ETFs) that would offer staking rewards from Ethereum and Solana. The SEC's concerns center on the classification of these staking activities as securities, which could complicate the approval process. This development follows a broader regulatory trend where the SEC has scrutinized staking services, such as those provided by Lido and Rocket Pool, as potential unregistered securities offerings.
Rex-Osprey's application includes a diverse range of cryptocurrencies, including Bitcoin, Ethereum, Solana, XRP, and even the TRUMP token. However, the inclusion of staking rewards in these ETFs has raised red flags with the SEC, which has previously targeted staking services offered by platforms like Coinbase and Kraken. The agency's stance suggests that such staking arrangements may be viewed as investment contracts, thereby classifying them as securities.
The SEC's scrutiny is part of a broader regulatory approach that has led other firms, such as Ark Invest and Fidelity, to amend their ETF filings by removing references to staking. These actions reflect the industry's cautious response to the SEC's regulatory framework concerning staking activities.
As Rex-Osprey await the SEC's decision, the outcome could significantly impact the future of crypto ETFs that incorporate staking rewards, including Canary Capital's recent proposal for a staked TRX ETF.. The industry's focus remains on how the SEC will navigate the complex intersection of cryptocurrency innovation and regulatory compliance.
