The U.S. Securities and Exchange Commission (SEC) has raised concerns about the effectiveness of REX Financial and Osprey Funds’ staked Ethereum and Solana (SOL) exchange-traded funds (ETFs). The SEC believes these funds may not qualify as ETFs due to their unique business structure, which conflicts with a key regulatory requirement known as the ‘ETF rule.’ The SEC specifically pointed out that the c-corp structure used in these funds contradicts the 6C-11 regulation governing ETF structures. This raises questions about whether the funds meet the definition of an ‘investment company’ under the Investment Company Act, which would be a significant hurdle for them to overcome.