EddieJayonCrypto
30 May 25
REX Shares filed a prospectus to launch two ETFs that will hold and stake Ethereum (ETH) and Solana (SOL) using a rare C-corporation structure to bypass the usual SEC 19b-4 review process. Each fund will own a Cayman Islands subsidiary that buys spot ETH and SOL and participates in staking to earn r...
REX Shares has filed to launch two Ethereum (ETH) and Solana (SOL) staking ETFs, employing a rare C-corporation structure to circumvent the SEC’s usual 19b-4 review process. This innovative approach signals regulatory easing on including staking revenue within ETFs.Each ETF will hold a Cayman Islands subsidiary responsible for acquiring spot ETH and SOL and participating in protocol staking to generate native rewards. The funds will be listed on Nasdaq, managed by REX Advisers, with a management fee of 0.75%. Due to U.S. income tax obligations on the C-corp, total estimated expenses rise to approximately 1.28% annually.The use of a C-corp wrapper, more commonly seen in master-limited-partnership funds, acts as a strategic legal workaround, potentially allowing the ETFs to launch within weeks without the delays of the traditional 19b-4 exchange-rule change review that has impeded spot Bitcoin ETFs.This filing follows the SEC’s recent clarification that protocol staking is not considered a securities transaction, thereby removing a significant legal roadblock for staking-based ETFs. While the SEC still requires case-by-case review for ancillary staking services such as slashing protection or early withdrawals, the core staking activity now faces no blanket regulatory prohibition.By circumventing regulatory hurdles through the Investment Company Act of 1940 structure, REX Shares’ proposed ETFs represent a clever regulatory and legal innovation. They offer investors exposure not only to the underlying cryptocurrencies but also to yield generated from staking rewards, marking a notable development in the evolution of blockchain asset investment products.