The five crypto exchange-traded funds (ETFs) from REX Shares and Osprey Funds are likely to debut only next week with a structure akin to their Solana SSK ETF, despite the Securities and Exchange Commission (SEC) approval.
This structure enables the funds to primarily hold spot crypto assets while retaining the ability to use derivatives and invest in other ETFs when market conditions require. The funds operate within established investment company regulations rather than corporate tax structures.
The RIC approach provides different operational requirements, tax treatment, and regulatory oversight compared to C-corporations. These differences affect how the funds distribute returns to investors while offering a middle path between pure spot exposure and complete structural innovation.
Seyffart suggested that the SEC deliberately stalled conversions to prevent ETFs from launching before establishing comprehensive digital asset listing standards.
The proposed framework would allow ETF sponsors to bypass the customary Form 19b-4 process when underlying tokens meet predetermined criteria, including market capitalization, on-exchange trading volume, and daily liquidity thresholds.
Sponsors would submit registration statements on Form S-1 and observe standard 75-day review periods before listing.
Amid this backdrop, the agency appears reluctant to approve products that could complicate future regulatory frameworks or create difficult-to-reverse precedents.
Given the proximity to the expected month for massive altcoin ETF approvals, it remains uncertain how REX-Osprey’s hybrid structure will perform.
Although the registered investment company approach provides immediate market access, it may have disadvantages regarding fees and tax structures compared to pure spot products.
