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The U.S. Securities and Exchange Commission (SEC) has cast doubt on whether Solana (SOL) and Ethereum (ETH) staking funds proposed by REX Financial and Osprey Funds can legally qualify as exchange-traded funds (ETFs). In a May 30 letter, regulators highlighted structural conflicts with the 6C-11 "ETF rule," which governs permissible corporate frameworks for such products.
The SEC specifically questioned the funds' use of a rare C-corporation model, stating it may not meet the Investment Company Act's definition. ——"Disclosures about the Funds’ status as investment companies could be misleading,"—— the agency warned. This marks the latest regulatory challenge for crypto investment products seeking mainstream adoption.
Bloomberg ETF specialist Eric Balchunas noted REX's legal team believes the issues are resolvable. 【Industry observers】 suggest issuers are aggressively innovating structures to gain first-mover advantage. The SEC's stance comes despite its recent guidance clarifying that proof-of-stake blockchain operations don’t inherently violate securities laws.
The delays affect multiple filings with October decision deadlines, according to analyst James Seyffart. Market participants continue monitoring developments, as approved staking ETFs could channel 【billions】 in traditional finance capital into crypto markets. Notably, the SEC maintains separate reviews for spot Ether and XRP ETF proposals.
While the SEC recently affirmed staking protocols aren’t securities transactions, its cautious approach to investment vehicles persists. This creates tension with crypto firms urging clearer regulations. As of press time, neither REX nor Osprey has publicly detailed structural adjustments to address the SEC's concerns.