Two new ETFs focusing on Ethereum and Solana planned for launch in the US are facing potential regulatory hurdles.
ETF Registration and SEC Response
REX Financial and Osprey Funds received preliminary approval from the US Securities and Exchange Commission (SEC) for creating ETFs linked to Ethereum and Solana. However, the SEC expressed concerns over whether these funds meet the definition of an 'investment company' under federal securities laws. In a letter from the SEC, it was indicated that the funds may have been falsely registered and that their statements could be misleading.
Analyst Comments and Future of ETFs
REX Financial's General Counsel Greg Collett stated they intend to address SEC's concerns. ETF analyst at Bloomberg Intelligence James Seyffart noted that even if SEC does not permit this structure to be listed, simpler ETFs with staking will eventually succeed. It's only a matter of time.
History of ETF Regulation in the US
Similar situations have occurred before: in March, the SEC criticized the first ETF investing in the private credit market immediately after it began trading. The SEC raises questions regarding new ETFs, highlighting its attention to alternative assets.
Further registration steps for new cryptocurrency ETFs will depend on the SEC's decision and the ability to comply with federal requirements.
