Rex Shares has achieved a significant milestone in cryptocurrency investment products by securing SEC approval for its innovative Ethereum and Solana staking exchange-traded funds, marking a potential breakthrough in regulated crypto yield strategies. The Rex-Osprey ETH + Staking ETF (ticker: ESK) and Rex-Osprey SOL + Staking ETF (ticker: SSK) will trade on Nasdaq and represent the first U.S.-listed ETFs designed to generate returns through blockchain staking mechanisms. Unlike traditional spot crypto ETFs, these funds operate under the Investment Company Act of 1940, allowing them to bypass the complex 19b-4 approval process that has delayed many cryptocurrency products, potentially accelerating their path to market.
The innovative structure of these funds centers around staking a substantial portion of their crypto holdings to generate additional yields for investors. The Ethereum ETF targets staking at least 50% of its holdings, while the Solana fund follows a similar strategy, both aiming to capture the passive income opportunities available through proof-of-stake blockchain networks. Rex Shares utilizes Cayman Islands-based subsidiaries to hold the underlying digital assets, a common regulatory workaround for crypto funds, though this structure means the ETFs will face C-corporation taxation rather than the pass-through treatment of traditional ETFs.
Investors considering these funds should be aware of their fee structures and risk profiles, with the Ethereum ETF carrying a 1.28% annual expense ratio and the Solana fund at 1.40%, including management fees and estimated tax expenses. Both products emphasize significant risks including liquidity constraints, regulatory uncertainties, and the inherent volatility of cryptocurrency markets. The funds will function similarly to traditional ETFs with cash-based creations and redemptions, relying on market makers and authorized participants to maintain trading liquidity.
While SEC effectiveness has been declared, the actual launch timeline remains dependent on final operational preparations, with industry analysts suggesting debuts could occur within weeks. This development reflects growing institutional demand for regulated cryptocurrency investment vehicles that offer yield-generating strategies beyond simple price appreciation. The funds could attract investors seeking exposure to Ethereum and Solana ecosystems without the complexities of direct cryptocurrency custody or technical staking requirements, potentially opening new avenues for mainstream adoption of crypto yield strategies through familiar investment structures.
