Anticipated Launch of Ethereum and Solana Staking ETFs by REX Shares Signals Regulatory Breakthrough

In a strategic move, REX Shares has submitted innovative filings for Ethereum (ETH) and Solana (SOL) staking exchange-traded funds (ETFs), employing unconventional regulatory strategies. Industry experts suggest that the approval process could be imminent, potentially bringing these highly anticipated products to market within the next few weeks.

Unique Structural Approach in REX Shares’ ETF Filings

Unlike typical ETF structures, REX Shares has opted to organize these funds as C-corporations-a rare choice in the ETF landscape. ETF analyst James Seyffart highlighted this approach, noting, “These ETFs are designed as 40-act funds with a distinctive structure that bypasses the usual 19b-4 regulatory pathway.”

“While the exact launch date remains uncertain, it’s likely to occur in the upcoming weeks,” Seyffart added.

According to the filing, the fund will be classified as a C-corporation for tax purposes, which means it will face new and deferred tax obligations. These liabilities could influence the fund’s net asset value, adding a layer of complexity for investors.

Seyffart explained that the proposed ETFs for Solana and Ether are structured as 40-act funds, which are designed to avoid the traditional 19b-4 approval process. This approach is seen as a workaround to expedite regulatory approval, especially after the SEC’s recent delays in approving similar products.

Regulatory Delays and the Path Forward

The SEC has historically been cautious with crypto-related ETFs, often delaying decisions. For instance, the agency postponed its ruling on Bitwise’s application to include staking features in its Ether ETF on May 21. Seyffart noted that such delays are typical, as the SEC tends to take considerable time to respond to 19b-4 filings.

Market Impact and Industry Expectations

Industry insiders believe that the upcoming launches of these staking ETFs could significantly influence the crypto investment landscape. Seyffart mentioned that the funds will gain exposure to Ether and Solana through Cayman Islands subsidiaries, a move designed to navigate regulatory hurdles.

“All these maneuvers are essentially creative legal and regulatory workarounds aimed at bringing these products to market,” Seyffart explained. “If successful, they could mark a pivotal moment for crypto ETFs.”

Supporting this outlook, Nate Geraci, President of ETF Store, remarked that REX Shares’ approach appears to be a strategic “regulatory terminate-around,” which could pave the way for two new crypto ETFs to debut soon. Both funds aim to stake at least 50% of their assets in Solana and Ether, respectively.

Industry Significance and Future Outlook

The launch of these ETFs has been eagerly awaited by market participants. Notably, BlackRock’s recent Ether ETF, launched earlier this year, was hailed as a major milestone, though its effectiveness is limited without staking capabilities. Robbie Mitchnick, BlackRock’s head of digital assets, emphasized that staking is crucial for the ETF’s full potential, underscoring the importance of these upcoming products.

As the crypto industry continues to evolve, the successful approval and launch of these staking ETFs could open new avenues for institutional and retail investors seeking exposure to Ethereum and Solana’s growth potential. The coming weeks are poised to be pivotal in shaping the future of crypto-based investment vehicles.