- REX Shares has filed with the SEC to launch Ethereum and Solana ETFs that stake a portion of their holdings, allowing investors to earn on-chain rewards.
- This move follows the SEC’s recent clarification that most proof-of-stake models are not automatically securities, paving the way for new staking-based crypto ETFs.
REX Shares is set to shake up the crypto investment landscape by filing with the U.S. Securities and Exchange Commission (SEC) to launch two innovative exchange-traded funds (ETFs) focused on Ethereum and Solana staking. The move, filed on May 30 and marked “immediately effective,” could bring staking rewards directly to retail investors in a regulated and accessible format.
A New Era for Staking ETFs
Unlike traditional crypto ETFs that merely track the price of digital assets, REX’s new funds plan to stake a significant portion of their holdings—at least 50% of the 80%+ invested in Ethereum or Solana—allowing investors to earn on-chain rewards as dividends. This novel approach aligns with the SEC’s recent clarification that proof-of-stake (PoS) models do not automatically qualify as securities, easing a major regulatory hurdle.
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Clever Legal Structure to Accelerate Launch
REX Shares’ filing uses a rare C-corporation structure rather than the more common regulated investment company (RIC) model. This strategic choice enables the firm to circumvent the longer approval process tied to the Securities Act of 1933 by instead leveraging the Investment Company Act of 1940. Bloomberg ETF analysts have praised this as a “clever legal and regulatory workaround,” highlighting its potential to fast-track the launch of the first spot Solana ETF—something current products don’t offer.
However, the C-corp structure, while beneficial for staking and tax advantages, may not be a permanent solution. Experts anticipate that more efficient structures like grantor trusts—already popular for spot Bitcoin and Ethereum ETFs—could eventually replace C-corps once regulatory and tax uncertainties, especially around staking, are resolved.
Regulatory Clarity Spurs Innovation
The timing of REX’s filing is notable. The SEC’s Division of Corporation Finance recently stated that staking activities under certain PoS blockchain protocols don’t fall within federal securities laws. SEC Commissioner Hester Peirce emphasized that features like early withdrawal options or bundled services do not change this stance. This clarity paves the way for innovative crypto ETFs that combine price exposure with staking rewards, potentially attracting a broader investor base.
What’s Next?
As REX Shares moves closer to launching these staking ETFs, the industry will be watching closely to see if this model gains traction and if other issuers follow suit. With regulatory uncertainties easing and demand for yield-bearing crypto products growing, staking ETFs could become a significant new chapter in the evolving crypto investment ecosystem.
