{"id":71161,"date":"2025-06-03T04:55:03","date_gmt":"2025-06-03T04:55:03","guid":{"rendered":"https:\/\/mycryptomania.com\/?p=71161"},"modified":"2025-06-03T04:55:03","modified_gmt":"2025-06-03T04:55:03","slug":"sec-puts-ethereum-and-solana-etf-plans-on-hold-over-compliance-worries","status":"publish","type":"post","link":"https:\/\/mycryptomania.com\/?p=71161","title":{"rendered":"SEC Puts Ethereum and Solana ETF Plans on Hold Over Compliance Worries"},"content":{"rendered":"

The U.S. Securities and Exchange Commission is once again putting the brakes on new crypto ETF proposals. This time, it\u2019s calling out two funds tied to Ethereum and Solana ETFs that were set to offer investors access to staking rewards. The products come from REX Shares and Osprey Funds, and while the ideas sound innovative on paper, the SEC isn\u2019t convinced they\u2019re playing by the rules.\u00a0<\/span><\/p>\n

The Core Problem: Are These Funds Even Investment Companies?<\/span><\/h2>\n

At the heart of the issue is whether these funds meet the legal definition of an investment company under U.S. law. The SEC has a strict view <\/span>on<\/span> what qualifies. It wants to know if these funds actually invest in securities as their main activity. If not, they can\u2019t use the usual registration process that most mutual funds or ETFs follow.<\/span><\/p>\n

The SEC has expressed concerns that Ethereum and Solana ETFs offering staking exposure may not qualify as ETFs under the Investment Company Act, highlighting regulatory uncertainty around crypto staking and the classification of crypto assets as securities. Read more:\u2026 pic.twitter.com\/WxlRLLYMA9<\/a><\/p>\n

\u2014 etf.com (@etfcom) June 2, 2025<\/a><\/p>\n\n

The regulator is also <\/span>worried<\/span> that the language used in the filings <\/span>might<\/span> give investors <\/span>the wrong idea<\/span>.<\/span> If the funds don\u2019t technically meet the criteria to be considered investment companies, the SEC doesn\u2019t want them acting like they do.<\/span><\/p>\n

Cayman Islands and Creative Structuring<\/span><\/h2>\n

Another thing raising eyebrows is <\/span>how these funds are structured<\/span>.<\/span> Instead of following a straightforward model, they <\/span>use<\/span> layers of corporate entities, including <\/span>C-corporations<\/span> and offshore subsidiaries in <\/span>places like<\/span> the Cayman Islands.<\/span> That\u2019s not unheard of in the finance world, but it does complicate things.<\/span><\/p>\n

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