SEC questions REX-Osprey’s launch of Ethereum and Solana collateralized ETFs

Odaily News The U.S. Securities and Exchange Commission (SEC) issued a warning to REX Shares and Osprey Funds on Friday evening, stating that their proposed Ethereum and Solana collateralized ETF products may not meet the definition of investment company in the Investment Company Act and fail to meet the legal compliance requirements of ETFs.
The two companies previously filed a registration statement to create a fund through a C-corporation structure, pledging at least 50% of its assets for additional income. Bloomberg analyst James Seyffart said the proposal uses a number of clever legal and regulatory circumvention strategies.
The SEC pointed out in the letter that the registration statement was effective before some unresolved issues were released, which violated the procedure, and asked the issuer to delay its effectiveness. SEC Assistant Director Brent J. Fields said that if the issues are still not resolved, the SEC will consider enforcement or forced resubmission.
Greg Collett, general counsel of REX Finance, told Bloomberg that the company will not launch the product until it meets SEC requirements. It is worth noting that the spot Ethereum ETF has been online for trading since July last year, but the spot Solana ETF has not yet been approved, so the pledged ETF faces double regulatory obstacles. (The Block)