Exchange-traded funds (ETFs) that incorporate staking for Ethereum and Solana could hit the U.S. market in the coming weeks, following a notable regulatory filing by ETF provider REX Shares.
Analysts suggest the move employs strategic regulatory workarounds to bypass conventional SEC procedures.
Unique Structure Behind the REX ETFs
According to ETF analyst James Seyffart, the REX filings utilize an unusual structural classification.
“These ETFs are structured as c-corps. Which is very rare in the ETF world,” he explained on May 30.
REX confirmed that the fund would be taxed as a C-corporation, meaning both current and deferred tax expenses will be factored into the fund’s Net Asset Value (NAV).
This model deviates from the norm and raises questions about its implications for investors.
Staking as a Missing Puzzle Piece
Staking has been one of the most anticipated features for spot Ethereum ETFs since their debut in July 2024.
Many industry executives believe the absence of staking has made these products incomplete.
ETF Store President Nate Geraci called REX’s approach a “regulatory end-around” and expressed confidence in their imminent launch.
Bypassing the SEC’s Traditional Path
Seyffart noted that the REX funds are 40-act funds and thus avoid the usual 19b-4 regulatory review process.
This is a critical workaround, particularly in light of the SEC’s recent delay on Bitwise’s application to add staking to its own Ether ETF.
“This was one way to get some level of signoff from the SEC,” Seyffart said.
Fund Mechanics and Market Entry
REX’s proposed ETFs will gain spot exposure to Ether and Solana through Cayman-based subsidiaries.
The structure is designed to allow staking of at least 50% of each token, marking a significant shift from earlier offerings.
Seyffart added, “All of this, assuming they launch in the near future, is a bunch of clever legal and regulatory workarounds to get these products to market.”
The launch, though not yet dated, appears imminent based on regulatory patterns and market positioning.
BlackRock Perspective Adds Weight
On March 20, BlackRock’s head of digital assets, Robbie Mitchnick, described their own Ether ETF as a “tremendous success.”
However, he admitted the lack of staking made the product “less perfect.”
The addition of staking capabilities is seen by many as essential for ETFs aiming to fully capture the benefits of Ethereum and Solana’s proof-of-stake networks.
The developments from REX could potentially open the floodgates for similar fund structures, signaling a new phase of innovation in crypto-linked investment vehicles.
