SEC Examines REX Shares and Osprey’s Staking ETFs

• Lyla Velez
• June 1, 2025

The SEC’s investigation could delay these ETFs’ Nasdaq debut, reflecting broader regulatory unease toward staking-based investments.

REX Shares and Osprey Funds are seeking to launch ETFs providing exposure to staking yields for Ethereum and Solana. These ETFs use a novel structure combining C-Corporation designation with Cayman subsidiaries to facilitate staking operations.

The SEC’s focus is on the regulatory compliance and disclosure requirements of the proposed C-Corp and Cayman structure. These ETFs would offer indirect exposure to staking, avoiding direct cryptocurrency investment. Linda Green, a Financial Regulatory Consultant, noted, “The use of a C-Corp structure and offshore subsidiaries raises both transparency and investor protection questions in the eyes of regulators.” Source

Market observers note the SEC’s concerns might impact ETFs’ market entry, raising questions over compliance and investor protection. The examination occurs as investor interest in staking products grows despite lacking formal approval.

The financial community is closely monitoring this situation, noting potential implications for future crypto financial products. Historical trends suggest regulatory challenges have often stymied similar initiatives.

Potential regulatory and financial consequences loom as the SEC assesses these novel ETF structures. Industry leaders anticipate shifts in the ETF landscape that could redefine stakeholder engagement with crypto assets.