SEC raised legal concerns about proposed Solana ETFs from REX Shares & Osprey Funds.
Solana (SOL) Ethereum (ETH) The exchange-traded funds industry has hit a significant regulatory hurdle. The exchange-traded funds have hit a major regulatory roadblock. filing In a letter dated 30 May, the U.S. Securities and Exchange Commission raised legal concerns about the REX Shares and Osprey Funds ETFs.
It highlighted seven ETFs including REX Osprey SOL, REX Osprey SOL, and REX Osprey SOL. “unresolved questions” a legal framework. The SEC specifically questioned whether the funds as they are currently structured qualify as “investment companies.”
To meet this definition, a fund must invest primarily in or trade securities or at least 40 percent of assets should be securities. The SEC stated that Form N-1A may have been submitted in an improper manner. Investors may not be informed if they do not consider the funds to be investment companies.
SEC has also expressed concerns over the SEC’s compliance with Rule 6c-11 of Investment Company Act that governs ETF exchange listing requirements. REX Shares & Osprey Funds must update their submissions before the SEC can approve them.
REX-Osprey Ethereum ETFs and Solana: Issues
These ETFs, which are being proposed by REX Shares & Osprey Funds for Solana & Ethereum, do not conform to the law. Bloomberg analyst James Seyffart said that these funds have several uses. “clever workarounds” Bypass standard listing requirements
For example, the funds are structured as C corporations—an uncommon setup for ETFs. It allows them to avoid the question of whether ETH is considered a security or not. “securities” Investment Company Act. They also have Cayman Islands subsidiary companies to get around regulations on crypto-custodians.
Due to this regulatory maneuver, the fund went into effect May 30th without needing SEC approval using the 19b-4 Process. To date, no exchange had listed the fund as of June 2.
“This article is not financial advice.”
“Always do your own research before making any type of investment.”
“ItsDailyCrypto is not responsible for any activities you perform outside ItsDailyCrypto.”
Source: crypto.news
