SEC Pushes Back on Crypto ETFs With Staking Rewards

These funds would let investors earn yield by locking tokens to support blockchain operations — but the SEC sees legal risks in the structure.

SEC Questions ETF Status and Filing Accuracy

On Friday, the SEC sent a letter to ETF Opportunities Trust, the legal vehicle behind the filings. As Bloomberg reported, the Commission warned that the ETFs may not meet the legal definition of an investment company under federal law — a key requirement for listing.

The agency also claimed the registration documents might mislead investors by implying compliance where there may be none.

REX Financial’s legal head, Greg Collett, stated that the company won’t proceed until the SEC is satisfied. “We believe we can address the Commission’s concerns,” Collett told Bloomberg.

Analysts Expect Staking ETFs to Eventually Succeed

Despite the setback, analysts see staking ETFs as inevitable. James Seyffart of Bloomberg Intelligence noted that while the SEC opposed this specific structure, it hasn’t shut the door entirely.

He said, “More direct and compliant approaches to staking in ETFs will succeed — the timeline is the only unknown.”

This isn’t the first time the SEC has intervened so decisively. In March, the Commission rebuked a private credit ETF by State Street and Apollo Global Management just hours after it began trading.

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REX had already received effective registration on the same Friday, positioning the firm for a mid-June launch. But the SEC’s follow-up warning has now frozen the timeline.

ETF Roadmap Faces SEC’s Tightening Grip

The SEC warned that if the issues remain unresolved, further regulatory action could follow. The agency made clear it won’t tolerate structures that sidestep established law.

As Bloomberg notes, the broader effort to bring staking into U.S.-regulated ETFs continues — but the path ahead remains narrow and heavily scrutinized.

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