SEC Throws Cold Water on REX-Osprey’s Ethereum and Solana ETF Dreams

Regulators hit pause on crypto’s latest Wall Street pipe dream—because nothing says ’mature asset class’ like endless delays and bureaucratic shrugs.

The SEC’s latest move? A classic regulatory sidestep, pushing back decisions on REX-Osprey’s proposed Ethereum and Solana ETFs. Because why approve innovation when you can drown it in paperwork?

Meanwhile, TradFi dinosaurs nod approvingly—after all, those 19th-century market structures aren’t going to protect themselves.

Issues with REX-Osprey Ethereum and Solana ETFs

The proposed solana and Ethereum ETFs by REX Shares and Osprey Funds are legally unconventional. According to Bloomberg analyst James Seyffart, the funds use several “clever workarounds” to bypass standard listing requirements.

BIG NEWS: @REXShares just filed an effective prospectus for Solana and Ethereum staking ETFs to list here in the US. Don’t know launch date but could be within the next few weeks. These are 40-act funds with a unique structure and do not go through the 19b-4 process pic.twitter.com/cqUCWlFAZW

For example, the funds are structured as C corporations—an uncommon setup for ETFs. This theoretically allows them to sidestep whether ETH or SOL are considered “securities” under the Investment Company Act. In addition, the companies are using Cayman Islands subsidiaries to avoid regulations governing crypto custodians.

Due to these regulatory maneuvers, the funds went into effect on May 30 without requiring SEC approval through the 19b-4 process. However, as of June 2, no exchange has listed the fund.