James Seyffart pointed out that the C-corporation model—seldom applied in the ETF space—was strategically employed to bypass the standard 19b-4 regulatory review process.
According to a May 30 filing, REX Shares submitted a prospectus that became effective immediately, aiming to launch two exchange-traded funds (ETFs) designed to hold and stake Ethereum (ETH) and Solana (SOL).
In a social media update, Bloomberg ETF analyst James Seyffart noted that the ETFs incorporate a C-corporation structure—an uncommon approach in the ETF sector—intended to avoid the traditional 19b-4 review process.
REX has not yet revealed details about seed capital or a confirmed launch timeline. However, Seyffart mentioned that trading could begin “in the coming weeks,” if the Depository Trust Company approves the seed shares and Nasdaq finalizes the symbol reservation.
Staking ETFs for ETH and SOL Unveiled
As outlined in the May 30 prospectus, each ETF will include a fully owned subsidiary based in the Cayman Islands, which will acquire spot Ethereum and Solana and engage in protocol staking to generate native token rewards.
Nasdaq plans to list the products under the regulatory framework of the Investment Company Act of 1940.
REX Advisers plans to impose a 0.75% management fee and handle standard operational expenses. Additionally, the C-corporation structure will account for both current and deferred U.S. income taxes, resulting in projected first-year costs amounting to 1.28% of total assets.
Seyffart explained that the use of a C-corporation structure—typically seen in master-limited-partnership funds—seems to offer “a possible route to gain some degree of SEC approval” for including staking income within a registered ETF.
Since funds regulated under the Investment Company Act of 1940 don’t need an exchange-rule amendment, they bypass the 19b-4 filing process that postponed spot Bitcoin ETFs until January 2025 and continues to prevent conventional grantor-trust structures from participating in staking.
“All of this, assuming they launch in near future, is a bunch of clever legal and regulatory work-arounds to get these products to market.”
Seyffart added:
Filing Comes After SEC Clarifies Staking Rules
The filer submitted the document just one day after the Securities and Exchange Commission (SEC) declared that protocol staking—whether through self-direction, delegation, custodial services, or pooled arrangements—does not qualify as a securities transaction under federal regulations.
The staff letter clarified that participants “do not need to register” such activities, resolving a key legal uncertainty that had previously complicated ETF staking proposals.
Analysts view the guidance as a gateway for fund providers aiming to generate yield from their proof-of-stake assets. While the SEC will still evaluate related services—such as slashing protection or early withdrawal options—on a case-by-case basis, it no longer broadly restricts primary staking activity.
