Imminent Launch of ETH & SOL Staking ETFs
The US could see its first Ethereum (ETH) and Solana (SOL) staking exchange-traded funds (ETFs) within weeks. This follows a recent filing by REX Shares employing what ETF analysts describe as “regulatory workarounds.”
Staking ETFs: A Significant Development
The inclusion of staking has been highly anticipated since the July 2024 launch of spot Ether ETFs. Many industry experts felt these products were incomplete without this key feature.
REX Shares' Unique Structure
ETF analyst James Seyffart highlighted the unusual structure of the REX Shares filing: "These ETFs are structured as c-corps, which is very rare in the ETF world." He suggests a launch date within the next few weeks. The filing reveals the fund's classification as a C-corporation for tax purposes, impacting net asset value.
Seyffart explained that the proposed Solana and Ether staking ETFs "are 40-act funds with a unique structure and do not go through the 19b-4 process." This contrasts with the SEC's delay in its decision on Bitwise’s application to add staking to its Ether ETF on May 21, a delay Seyffart attributed to the SEC's typical response time to 19b-4 filings.
Imminent Launch Confirmed
The ETFs will gain spot exposure to Ether and Solana through Cayman subsidiaries. Seyffart describes the approach as "a bunch of clever legal and regulatory workarounds to get these products to market." He acknowledges both pros and cons but suggests this structure facilitated some level of SEC approval.
ETF Store President Nate Geraci echoed this sentiment, referring to REX Shares' strategy as "a regulatory end-around." He expects both ETF launches to be imminent, with each fund aiming to stake at least 50% of its assets in Solana and Ether.
This development follows comments from BlackRock’s head of digital assets, Robbie Mitchnick, who, while praising the success of BlackRock’s Ether ETF, acknowledged its limitations without staking functionality.
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