SEC Flags Compliance Concerns Over Proposed Ethereum and Solana ETFs

SEC Raises Concerns Over Ethereum and Solana ETFs

The U.S. Securities and Exchange Commission (SEC) has raised questions about two proposed exchange-traded funds (ETFs) tied to Ethereum and Solana. In a letter to ETF Opportunities Trust, the SEC highlighted unresolved concerns about whether the REX-Osprey ETH and SOL ETFs—which include staking features—comply with the Investment Company Act of 1940 by primarily investing in securities.

ETF Opportunities Trust, a Delaware-based open-end investment company, is the legal entity behind these proposed ETFs. Filed on January 21 by REX Shares and Osprey Funds, the registration also included other crypto-related products, such as the first proposed ETFs for meme coins like TRUMP, BONK, and Dogecoin, as well as funds tracking Bitcoin and XRP.

The SEC questioned whether these ETFs meet the legal criteria for an investment company, which could affect their registration and exchange listing eligibility. The agency also suggested that the funds may have incorrectly filed under Form N-1A, typically used for federally recognized investment companies, and might not satisfy the conditions of Rule 6c-11, which streamlines ETF operations.

This development follows recent SEC guidance clarifying that most crypto staking activities are exempt from federal securities regulations—provided certain conditions are met. However, Commissioner Caroline Crenshaw dissented, citing ongoing legal uncertainties.

The SEC has not yet commented further, and the proposed Ethereum and Solana ETFs remain unlisted and unlaunched.