In short
- The SEC has expressed concern about whether the Rex-Superprey ETH and SOL ETFs qualify under the 1940 Investment Company Act.
- Despite ongoing discussions, the registration of the ETFs came into force on 30 May without resolving the problems.
- The letter came one day after SEC staff had issued guidelines, which exempted certain expansion practices of securities rules.
The US Securities and Exchange Commission warned on Friday that two proposed listed funds linked to Ethereum and Solana may not meet the legal definition of an investment company, which is concerned about their registration and potential suitability for exchange list.
In one letter In order to consult the ETF opportunities trust, the SEC said that the staff had unsolved questions about whether the Rex-Superprey ETH and SOL ETFs, including expansion components, have been structured to mainly invest in effects as required under the 1940 Investment Company Act.
ETF Opportunities Trust is a open-end investment company established in Delaware that serves as a legal vehicle or issue for launching several listed funds, including those managed by Rex.
Sponsors Rex shares and Osprey funds have one declaration For their proposed Ethereum and Solana ETFs on January 21.
The submission also included various other crypto-linked products, including the first proposed ETFs for the Trump Meme Coin, Bonk and Dogecoin, as well as additional funds that Bitcoin and XRP follow.
While the registration statement for the Rex-Superprey Ethereum and Solana ETFs came into force on 30 May, the funds were not launched and they are not mentioned on a trade show.
“As we have communicated to you several times, commission personnel still have unsolved questions whether the funds, if structured and exploited as proposed, would be able to meet the definition of ‘investment company’ under the Investment Company Act,” SECSpersoneel wrote.
A fund qualifies as an investment company under American legislation if it is mainly involved in investing or acting effects, or if investment effects make it up More than 40% of his total assets.
The agency also said that the ETFs may have been wrongly submitted under Form N-1A, which is reserved for funds that are eligible as investment companies according to federal legislation, and can also fall on the conditions of Rule 6c-11, so that ETFs can operate and mention without individual exemption to find.
“Insofar as this concern remains unsolved, the committee staff will consider the correct following steps to guarantee compliance with the federal securities laws,” SEC staff wrote.
The letter follows Personnel guidance Published on Thursday clarifies that certain types of crypto deployment, such as self-different and custody, are not involved in the supply or sale of securities according to federal legislation.
The guidelines, which is not legally binding, meant a shift of previous enforcement positions and attracted a different opinion of commissioner Caroline Crenshaw, who said that the move continues to sow with uncertainty about what the law is. “
The SEC did not immediately respond to a request for comment.
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