Anticipated Early Implementation of Staking Functionality for Ethereum and Solana Exchange-Traded Funds
Rising Expectations for Approval of U.S. Crypto ETFs with Staking Features
Speculation abounds that the U.S. Securities and Exchange Commission (SEC) may expedite the approval of exchange-traded funds (ETFs) that offer staking features, according to Bloomberg ETF analyst James Seyffart. This stems from REXShares' proposal for Ethereum and Solana ETFs, which, Seyffart notes, are pursuing an unconventional route to listing.
Navigating Regulation with the Investment Company Act
Seyffart suggests these staking ETFs could bypass some regulatory hurdles by structuring themselves under the Investment Company Act of 1940 (40 Act). Unlike conventional spot crypto ETFs, these products do not require a separate 19b-4 filing with the SEC, owing to their alignment with the 40 Act's established regulations.
This pre-approved fund structure could potentially expedite the approval process, though no specific launch date has been announced for REXShares' products. The analyst anticipates the ETFs to enter the market within the near future.
Paving a Path for U.S. Crypto Yield Access
Should these ETFs succeed, they could mark a crucial milestone, offering U.S. investors a structured avenue to access staking-based crypto returns.
Addressing Regulatory Concerns
Staking, long a focus of SEC scrutiny due to its potential classification as a security, may find streamlined approval with REXShares' strategy of structuring these ETFs under the 40 Act.
Growing Demand for Staking-focused Investments
The emerging trend to incorporate staking yields into traditional financial products reflects the increasing institutional and retail investor appetite for yield-oriented crypto investments.
While the current regulatory framework under the 40 Act poses challenges for crypto ETFs with staking features, potential solutions include amending the Act, developing a new regulatory framework tailored to these innovative products, or utilizing alternative structures such as trusts. Such changes could pave the way for the approval of more staking-centric ETFs in the United States.
- The structured approach of REXShares' staking ETFs, aligning with the Investment Company Act of 1940 (40 Act), could potentially bypass some regulatory hurdles, easing the way for technology-driven, staking-based crypto investments in finance.
- If successful, the launch of staking ETFs like REXShares' Ethereum and Solana ETFs could open up a new avenue for U.S. investors to tap into cryptocurrency returns, addressing growing demand for yield-oriented crypto investments as part of mainstream finance and technology.
