REX pushes ETH and SOL staking ETFs via rare C-Corp as SEC softens stance

REX Shares filed an instantly effectual prospectus to database 2 exchange-traded funds (ETFs) that volition clasp and involvement Ethereum (ETH) and Solana (SOL), according to a May 30 filing.

Bloomberg ETF expert James Seyffart highlighted successful a societal media post that the ETFs present a C-corporation operation seldom utilized successful the ETF manufacture to sidestep the customary 19b-4 review.

REX did not disclose effect superior oregon an authoritative motorboat date. Still, Seyffart said trading could commencement “within the adjacent fewer weeks” if effect shares wide the Depository Trust Company and Nasdaq completes awesome reservation.

ETH and SOL staking ETFs

According to the May 30 prospectus, each money volition ain a wholly owned Cayman Islands subsidiary that buys spot Ethereum and Solana and participates successful protocol staking to gain autochthonal rewards.

Nasdaq volition database the products nether the Investment Company Act of 1940.

REX Advisers volition complaint a 0.75% absorption interest and screen mean operating costs. At the aforesaid time, the C-corp conveyance volition accrue existent and deferred US income tax, bringing estimated first-year expenses to 1.28% of assets.

Seyffart said that the C-corp wrapper, much communal successful master-limited-partnership funds, appears to person provided “one mode to get immoderate level of sign-off from the SEC” for staking gross wrong a registered ETF. 

Because 40-Act funds bash not necessitate an exchange-rule change, they debar the 19b-4 filings that delayed spot Bitcoin ETFs until January 2025 and inactive artifact accepted grantor-trust vehicles from staking.

Seyffart added:

“All of this, assuming they motorboat successful adjacent future, is simply a clump of clever ineligible and regulatory work-arounds to get these products to market.”

Filing follows SEC clarification connected staking

The submission lands 1 time aft the Securities and Exchange Commission (SEC) announced that protocol staking, whether self-directed, delegated, custodial, oregon pooled, does not represent a securities transaction nether national law.

The unit missive said participants “do not request to register” those activities, removing a cardinal ineligible question that has clouded ETF staking proposals.

Market observers presumption the guidance arsenic an accidental for money issuers seeking to adhd output to their proof-of-stake holdings. The SEC cautioned that ancillary services specified arsenic slashing extortion oregon early-withdrawal features inactive necessitate a case-by-case analysis, but the halfway enactment nary longer faces broad prohibition.

The station REX pushes ETH and SOL staking ETFs via uncommon C-Corp arsenic SEC softens stance appeared archetypal connected CryptoSlate.