The SEC has raised concerns about two proposed exchange-traded funds (ETFs) linked to Ethereum and Solana, questioning whether they qualify as investment companies under the Investment Company Act of 1940. The ETFs, managed by REX Shares and Osprey Funds, include staking components and were registered on May 30, 2025, though unresolved regulatory issues remain. The SEC's inquiry referred to the necessity for such funds to primarily invest in securities, a requirement that may not be met. Furthermore, the ETFs potentially filed under an incorrect registration form reserved for investment companies. The SEC also issued guidance on crypto staking, exempting most staking activities from federal securities regulations, which adds further context to the ongoing compliance discussions around these ETFs. Despite the issues at hand, the SEC did not immediately comment on the situation regarding these ETFs or provide a timeline for resolution, underlining the regulatory complexities currently encircling the cryptocurrency market.

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