Staking ETFs Face Delays as SEC Raises Red Flags Over Compliance

The U.S. Securities and Exchange Commission has objected to two proposed crypto ETFs from REX Financial and Osprey Funds, which plan to offer staking exposure for Ethereum and Solana. In a May 30 letter, SEC staff said the funds may not qualify as investment companies under the Investment Company Act, a requirement for listing ETFs on public markets. The funds had received effective registration status earlier that week.

The SEC also questioned whether the funds' structure complies with Rule 6c-11, which defines how ETFs must be organized and operated. The agency flagged potentially misleading disclosures about the funds’ legal status and asked the issuers to postpone any launch plans until the issues are resolved.

Despite several rounds of comments and revisions throughout the spring, the SEC maintains that key legal concerns remain. The review now stands as a major hurdle for launching these staking-based ETFs, which were initially expected to debut by mid-June.

Critics Say SEC’s Position Reveals Inconsistent Crypto Policy Under Trump-Era Shift

The SEC’s opposition to staking-based ETFs has renewed criticism of its evolving approach to crypto regulation. Commissioner Caroline Crenshaw, the Commission’s lone Democrat, said the case exposes contradictions in how the agency handles digital assets under the Trump-era shift. She noted the inconsistency of treating crypto assets as outside securities laws during registration but as securities when used in new financial products.

How is it that these crypto assets are supposedly not securities when it comes to registration requirements, but conveniently are securities when a registrant sees an opportunity to sell a new product?

— Caroline A. Crenshaw.

Since early 2025, the SEC has eased its enforcement stance, pausing or dropping several major cases, including one against Binance and founder Changpeng Zhao. Meanwhile, firms like REX and Osprey continue to seek SEC approval for Ethereum and Solana staking products, aiming to attract traditional capital.

Read more: SEC Extends Review of Solana ETF Filings, Opens Public Comment

Critics argue that the SEC’s case-by-case method creates uncertainty and lacks transparency. Although the agency has said that assets like memecoins and stablecoins fall outside its jurisdiction, it continues to challenge ETF proposals built around them. Crenshaw warned that this ambiguity threatens confidence in the regulatory process.

ETF Issuers Remain Optimistic as Analysts Predict Eventual Approval

Despite SEC objections, issuers remain confident that staking-based ETFs will eventually launch in the U.S. REX has said it will wait to move forward until the Commission’s concerns are resolved but believes it can meet regulatory requirements. The company’s general counsel said it is working closely with the SEC to address all outstanding issues.

Analysts are similarly optimistic. Bloomberg Intelligence’s James Seyffart said approval is likely a matter of timing, not principle, as institutional demand for crypto staking products continues to grow. Both REX and Osprey aim to be first to market once the regulatory path is clear.

The broader industry sees these filings as a key test of how staking can be incorporated into regulated investment vehicles. If approved, the ETFs could open a channel for mainstream capital to reach Proof-of-Stake networks like Ethereum and Solana.