{"id":43626,"date":"2025-06-02T15:30:13","date_gmt":"2025-06-02T12:30:13","guid":{"rendered":"https:\/\/coinengineer.net\/blog\/?p=43626"},"modified":"2025-06-02T14:30:05","modified_gmt":"2025-06-02T11:30:05","slug":"sec-questions-the-legality-of-ethereum-and-solana-etfs","status":"publish","type":"post","link":"https:\/\/coinengineer.net\/blog\/sec-questions-the-legality-of-ethereum-and-solana-etfs\/","title":{"rendered":"SEC Questions the Legality of Ethereum and Solana ETFs!"},"content":{"rendered":"<p data-start=\"61\" data-end=\"397\"><strong>The U.S. Securities and Exchange Commission (<a href=\"https:\/\/coinengineer.net\/blog\/bitcoin-critical-security-proposal-og-investors\/\">SEC<\/a>)<\/strong> has raised serious legal concerns regarding exchange-traded funds (ETFs) <strong>based on Ethereum (<a href=\"https:\/\/coinengineer.net\/blog\/ethereum-etps-record-inflows-bitcoin-xrp-outflows\/\">ETH<\/a>)<\/strong> and <strong>Solana (<a href=\"https:\/\/coinengineer.net\/blog\/silk-road-founders-items-sold-for-bitcoin\/\">SOL<\/a>)<\/strong>. The inclusion of <strong data-start=\"255\" data-end=\"277\">staking mechanisms<\/strong> in these ETFs has sparked debate over whether they meet the legal definition of an &#8220;investment company&#8221; under U.S. law.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_71 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/coinengineer.net\/blog\/sec-questions-the-legality-of-ethereum-and-solana-etfs\/#SEC_Questions_the_Definition_of_Investment_Company\" title=\"SEC Questions the Definition of Investment Company\">SEC Questions the Definition of Investment Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/coinengineer.net\/blog\/sec-questions-the-legality-of-ethereum-and-solana-etfs\/#SEC_Statement_Unclear_Stance_on_Staking\" title=\"SEC Statement: Unclear Stance on Staking\">SEC Statement: Unclear Stance on Staking<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/coinengineer.net\/blog\/sec-questions-the-legality-of-ethereum-and-solana-etfs\/#Not_Just_ETH_and_SOL\" title=\"Not Just ETH and SOL\">Not Just ETH and SOL<\/a><\/li><\/ul><\/nav><\/div>\n<h3 data-start=\"399\" data-end=\"453\"><span class=\"ez-toc-section\" id=\"SEC_Questions_the_Definition_of_Investment_Company\"><\/span>SEC Questions the Definition of Investment Company<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"455\" data-end=\"823\">In an official letter addressed to<strong> ETF Opportunities Trust, the SEC<\/strong> stated that there are still unresolved questions about whether the ETH and SOL ETFs proposed by REX Shares and Osprey Funds meet the legal requirements outlined in the Investment Company Act of 1940. The focus is particularly on how the staking components impact the overall structure of these funds.<\/p>\n<p data-start=\"825\" data-end=\"1016\">These ETFs were registered with the SEC on January 21, and although the registration process was technically completed as of May 30, they have not yet been launched or listed on any exchange.<\/p>\n<p data-start=\"1018\" data-end=\"1283\">According to the SEC\u2019s evaluation, the ETFs may not meet the necessary conditions to file under the correct registration format, Form N-1A. Furthermore, they may not qualify under Rule 6c-11, which allows ETFs to operate without seeking individual exemptive relief.<\/p>\n<h3 data-start=\"1285\" data-end=\"1329\"><span class=\"ez-toc-section\" id=\"SEC_Statement_Unclear_Stance_on_Staking\"><\/span>SEC Statement: Unclear Stance on Staking<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"1331\" data-end=\"1529\">The SEC&#8217;s warning comes just one day after the agency issued guidance indicating that some types of staking\u2014such as self-staking and custodial staking\u2014do not fall under the federal securities laws.<\/p>\n<p data-start=\"1531\" data-end=\"1708\">However, this guidance is not legally binding and faced opposition from SEC Commissioner Caroline Crenshaw, who argued that the announcement further increases legal uncertainty.<\/p>\n<p data-start=\"1710\" data-end=\"1872\">The SEC emphasized that if the current questions remain unanswered, it will take appropriate steps to ensure the funds comply with federal securities regulations.<\/p>\n<h3 data-start=\"1874\" data-end=\"1898\"><span class=\"ez-toc-section\" id=\"Not_Just_ETH_and_SOL\"><\/span>Not Just ETH and SOL<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"1900\" data-end=\"2119\">The filing in question also included other cryptocurrency-related funds tied to<strong> Dogecoin (DOGE), BONK, and TRUMP<\/strong>. Still, the SEC&#8217;s primary focus has been on the legal structure of the<strong> ETH and SOL ETFs<\/strong> involving staking.<\/p>\n<p data-start=\"2121\" data-end=\"2356\" data-is-last-node=\"\" data-is-only-node=\"\">This development could mark a critical turning point for the future of crypto-backed ETFs. Following the approval of spot ETFs in the U.S. market, it&#8217;s become clear that products centered around staking also require regulatory clarity.<\/p>\n<hr \/>\n<p data-start=\"2121\" data-end=\"2356\" data-is-last-node=\"\" data-is-only-node=\"\"><em>You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don\u2019t forget to follow us on our\u00a0<a href=\"https:\/\/t.me\/coinengineernews\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><strong>Telegram,\u00a0<\/strong><\/a><a href=\"https:\/\/www.youtube.com\/@CoinEngineer\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><strong>YouTube<\/strong><\/a>,\u00a0and\u00a0<a href=\"https:\/\/twitter.com\/coinengineers\" target=\"_blank\" rel=\"nofollow noopener\"><strong>Twitter<\/strong><\/a>\u00a0channels for the latest\u00a0<a title=\"News\" href=\"https:\/\/coinengineer.net\/blog\/news\/\" data-internallinksmanager029f6b8e52c=\"7\">news<\/a>\u00a0and updates.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The U.S. Securities and Exchange Commission (SEC) has raised serious legal concerns regarding exchange-traded funds (ETFs) based on Ethereum (ETH) and Solana (SOL). The inclusion of staking mechanisms in these ETFs has sparked debate over whether they meet the legal definition of an &#8220;investment company&#8221; under U.S. law. SEC Questions the Definition of Investment Company<\/p>\n","protected":false},"author":29,"featured_media":31997,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9,2],"tags":[17117,17116,1000,39,6425,1574],"class_list":["post-43626","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-news","category-news","tag-company-act-of-1940","tag-crenshaw","tag-ethereum-etf","tag-sec","tag-solana-etf","tag-staking"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>SEC Questions the Legality of Ethereum and Solana ETFs! - Coin Engineer<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/coinengineer.net\/blog\/sec-questions-the-legality-of-ethereum-and-solana-etfs\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SEC Questions the Legality of Ethereum and Solana ETFs! - Coin Engineer\" \/>\n<meta property=\"og:description\" content=\"The U.S. Securities and Exchange Commission (SEC) has raised serious legal concerns regarding exchange-traded funds (ETFs) based on Ethereum (ETH) and Solana (SOL). 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