SEC STILL CONCERNED ABOUT CRYPTO ETF OFFERING STAKING REWARD

US regulators are now raising concerns about ETFs tracking Ethereum and Solana that offer exposure to staking, which may not meet the legal qualifications to be considered an ETF under federal securities law. The Securities and Exchange Commission (SEC) has expressed its doubts about two ETFs issued by REX Financial and Osprey Funds, which are planned to track Ethereum and Solana by offering staking rewards. Staking allows investors to earn rewards by holding tokens to help operate the blockchain. The SEC is worried that these two ETFs may not meet the legal definition of an investment company, which is necessary for the funds to be listed on the stock market. In a letter sent to ETF Opportunities Trust, the SEC revealed that the registration filings for the two ETFs could be deemed invalid and that disclosures related to their status as investment companies could be misleading. Greg Collett, general counsel at REX Financial, stated that they are working to meet SEC requirements and will not launch the funds until this issue is resolved. Although the SEC has yet to approve this structure for listing, Bloomberg Intelligence ETF analyst James Seyffart argues that a simpler effort to allow staking in US ETFs will ultimately succeed. However, the SEC seems to disagree with the way REX is trying to expedite this registration process.