Key Takeaways:
- SEC flags REX-Osprey’s Ethereum and Solana ETFs due to doubts over fund classification.
- SEC expresses its unresolved concerns, primarily regarding whether to classify the products that offer staking rewards as ETFs.
- SEC announced this through a letter written by its Associate Director, Brent J. Fields, in response to the REX-Osprey February ETF filing.
- While the SEC flagged the ETFs, it is expected to approve after addressing the concerns.
While REX Shares and Osprey Funds recently announced that they will soon get final confirmation from the Securities and Exchange Commission for their REX-Osprey ETFs, the SEC flagged the proposals by responding that they may not meet the legal qualifications for exchange-traded funds.
SEC Associate Director Brent J. Fields, in a letter, clarified that the proposed ETFs, the REX-Osprey Eth + Staking ETF and REX-Osprey Sol + Staking ETF, have certain unresolved questions and may not fall under the basic legal definition of exchange-traded funds.
According to Brent J. Fields, the Funds may have improperly filed their registration statement on Form N-1A. Fields wrote that to the extent that those concerns remained unresolved, the Commission staff would consider the appropriate next steps to ensure compliance with the federal securities laws.
The letter was addressed to ETF Opportunities Trust as a reply to its post-effective amendment, which was filed on January 21st, 2025. As a trust that oversees the REX-Osprey ETFs, it has yet to respond to the letter.
SEC Flags REX-Osprey ETFs that Offer Staking Rewards
As a collaboration between REX Shares & Osprey Funds, seven REX-Osprey ETFs were filed with the SEC on January 21st, 2025, including the Solana and Ethereum ETFs. Since both chains are Proof-of-Stake (PoS) based ecosystems, those ETFs were distinct from others.
These distinct funds, named the REX-Osprey Eth + Staking ETF and REX-Osprey Sol + Staking ETF, allow investors to earn extra rewards by staking their tokens to run the PoS-based blockchains. However, the SEC objected that these may not fit within the current regulatory frameworks of ETFs.
Following a response from REX Shares and Osprey Funds, web3 communities expect a discussion igniting with the SEC, providing clarity regarding the role of specific types of crypto staking in ETFs, including self-staking and custodial staking, which are now not classified as securities.
List of ETFs Filed by REX-Osprey
Including the Solana and Ethereum ETFs, REX-Osprey has filed for seven ETFs in January 2025. It also includes the TRUMP ETF, a product tied to the official meme coin of U.S. President Donald Trump. The complete list is given below.
- REX-Osprey TRUMP ETF
- REX-Osprey ETH ETF
- REX-Osprey BTC ETF
- REX-Osprey SOL ETF
- REX-Osprey XRP ETF
- REX-Osprey BONK ETF
- REX-Osprey DOGE ETF
About REX Shares
REX Shares is a U.S.-based ETF provider that has around $8 billion in assets as of the latest reports. It specializes in alternative strategy ETFs and ETNs, providing a growing suite of sophisticated trading opportunities for investors.
About Osprey Funds
Founded by REX Shares in 2019 as its crypto division, Osprey Funds later became an independent company, providing blockchain-based insights for traditional investors. Now, both companies collaborate on their crypto-based initiatives.