REX Shares is preparing to launch two innovative exchange-traded funds (ETFs) focused on staking Ethereum (ETH) and Solana (SOL) in the United States, potentially debuting within weeks. The filings reveal an unusual ETF structure leveraging C-corporations for tax purposes, which helps to circumvent the traditional SEC 19b-4 approval process that often delays such products.
The ETFs will employ Cayman Islands subsidiaries that buy spot ETH and SOL tokens and participate in protocol staking to earn native rewards. With management fees set at 0.75% and overall first-year expenses estimated at 1.28% due to tax liabilities, this approach represents a fresh legal and regulatory strategy to offer staking exposure in a regulated vehicle.
This development follows a recent SEC clarification stating that protocol staking activities do not constitute securities transactions, removing a key legal obstacle. Industry analysts view this regulatory softening as an opportunity for staking ETFs, which have been eagerly anticipated since the launch of spot ETH ETFs in July 2024. REX’s innovative structure provides a workaround to gain SEC approval more quickly, potentially catalyzing wider adoption of staking investment products.
Market observers see the imminent launch of these staking ETFs for ETH and SOL as significant, reflecting both legal ingenuity and increasing institutional demand for crypto staking exposure. The ETFs’ design carefully manages tax implications and regulatory challenges, distinguishing them from traditional fund vehicles and signaling a substantive advancement in cryptocurrency investment offerings.