The plan to launch two new crypto ETFs tied to Solana and Ethereum has hit a snag after the U.S. Securities and Exchange Commission (SEC) raised concerns that they are not fit for ETFs
On Friday, SEC reportedly sent a letter to RexShares, the company behind the ETFs, saying that the ETFs do not fit the legal definition of an “investment company.” That’s a requirement for any ETF that wants to be traded on the stock market.
The SEC also said the registration forms may have been “improperly filed” and that some of the information shared could be “potentially misleading.” In short, the agency thinks parts of the paperwork could confuse investors.
Meanwhile, Rex shared that it got a green light to launch the ETFs and was hoping to start trading both by the middle of June. Now, that plan might be delayed. The ETFs were initially created to allow inventors to earn rewards through staking. In simpler terms, Investors could earn extra crypto by locking up their assets which in turn would be used to run the blockchain network.
In response to this, Greg Collett, a general counsel at Res Financial said, “We think we can satisfy the SEC on the investment company question, and we don’t intend to launch the funds until we do that.” This means REX is prepared to work with SEC on this issue before moving forward with the launch.
Bloomberg ETF analyst James Seyffart shared some details of the letter on X. He explained that the agency’s main issue is with Rule 6c-11, also known as “The ETF Rule.” This rule allows ETFs to launch quickly without going through a lengthy approval process. According to Seyffart, the SEC believed these staking ETFs don’t qualify under this rule, which could prevent them from listing.
Meanwhile, this is not the first time the agency will intervened in such an event. In March 2025, the SEC publicly questioned an ETF from State Street and Apollo Global Management that invested in private credit just hours after it was listed.
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