Unlike the SEC-approved spot bitcoin and ether products—structured as ’33 Act commodity trusts—the REX-Osprey fund is being launched as a ’40 Act open-end ETF. That structure permits an ETF to operate as a registered investment company and can mix exposures, rather than holding only a single commodity in a trust format. The SEC itself emphasizes that spot bitcoin and ether “ETPs” are not ’40 Act ETFs, underscoring the distinct regulatory regimes at play here.
In its latest Form N-1A filing, the fund is presented alongside sister products and described as seeking results that correspond to the performance of the token. The principal strategy commits to investing at least 80% of net assets in XRP and/or other assets that provide exposure to the token, either directly or via a wholly-owned Cayman subsidiary.
The filing also caps investment in that subsidiary at 25% of total assets. Creation and redemption are available to authorized participants, with the fund reserving the right to settle redemptions in cash and noting a standard T+2 payout timeline, extendable to seven days under stress.
The prospectus further allows the ETF to invest in other investment companies (including ETFs) subject to Section 12(d)(1) limits and contemplates the use of derivatives as permitted under the ’40 Act—language that provides flexibility, but does not make derivatives the primary exposure.
Bloomberg’s James Seyffart, who tracks crypto ETPs, cautioned that the product is not “pure” spot, explaining “it will hold spot directly and other spot XRP ETFs from around the world to get its exposure.” He added: “The fund documents also have language that would allow derivatives usage for exposure if needed but that definitely isn’t the primary exposure method.”
ETF Store president Nate Geraci framed the launch as a regulatory maneuver enabled by the ’40 Act: “First ETF offering spot XRP exposure set to launch this week…REX-Osprey using clever regulatory end-around via ‘40 Act structure to bring this to market. Will be another good litmus test for ‘33 Act spot XRP ETF demand. Futures-based XRP ETFs already nearing $1bil in assets.”
At press time, XRP traded at $3.00.
