SEC Pressure Forces RexShares to Pivot—Staking ETFs Now in Play

Regulators just lit a fire under RexShares’ feet. The SEC’s latest crackdown has the firm scrambling to innovate—and staking ETFs are their Hail Mary.

Wall Street’s favorite pastime? Turning compliance headaches into revenue streams. RexShares is betting big that staking—the crypto cash cow regulators love to hate—can be repackaged into something palatable for the suits.

One problem: the SEC still thinks ’staking’ sounds suspiciously like ’printing money while skirting securities laws.’ But hey, since when has that stopped finance from finding a workaround?

$161 and Ethereum$2,583-based staking ETF products in the United States. This application is distinct from those of other investment companies, as it employs a unique and unconventional model.

ContentsA New crypto ApplicationExpert Opinions

A New Crypto Application

The application by RexShares deviates from the traditional 19b-4 process often used in ETF filings. Bloomberg Senior ETF Analyst James Seyffart highlighted on social media that this approach introduces significant innovation with its unique 40-Act funds structure, which breaks away from conventional financial instruments.

While the prospectus does not specify an exact launch date for the funds, James Seyffart expressed that he anticipates these products could materialize in the coming weeks. This notable application follows the recent assessment by the United States Securities and Exchange Commission (SEC), which stated that staking operations under the Proof-of-Stake (PoS) protocol WOULD not be considered securities. This stance could pave the way for developing new products in the market.

The SEC’s evaluation of staking has the potential to open up crypto-based financial instruments to a broader range of investors. While many spot ETF issuers attempt to integrate staking into their crypto ETFs, the agency continues to defer decisions on these applications.

Expert Opinions

James Seyffart praised RexShares’ method, emphasizing the innovative solution embedded in the application. According to the Bloomberg analyst, this strategy provides a new option for investors while aligning with regulatory standards.

James Seyffart: “As you can see from the application, they have showcased a remarkably intelligent approach.”

Following RexShares’ move, speculation arises about whether other major asset management companies will pursue similar products in the market. The crypto-friendly stance of the new SEC administration has created an environment where many asset management and ETF companies are racing for early-stage product approvals.

RexShares’ Solana and ethereum staking ETF application is notable for its model under US regulations. By utilizing 40-Act funds innovatively, the company might open new market opportunities. The SEC’s decision not to classify staking activities as securities strengthens the legal standing of such financial instruments. For investors, this could pave the way for more traditional capital entering the crypto market. As these developments unfold, an increase in similar applications and a rise in the diversity of digital asset-based products are expected in the future.

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