ETH, SOL ‘Very Rare’ Staking ETFs May Launch Imminently

In a move poised to reshape the U.S. cryptocurrency exchange‑traded fund (ETF) landscape, REX Shares has filed for Ethereum (ETH) and Solana (SOL) staking ETFs. Analysts now believe these “very rare” products could debut within weeks. Unlike typical ETF filings, REX Shares has structured both funds as C‑corporations—an unconventional approach that sidesteps the standard 19b‑4 SEC approval process. According to the filing submitted on May 30, 2025, “The Fund is classified as a C‑corporation for tax purposes, and, as such, will incur current and deferred tax expenses. Such current or deferred tax liabilities, if any, will be reflected in the Fund’s Net Asset Value” (SEC Filing: https://www.sec.gov/ix?doc=/Archives/edgar/data/0000000000/000000000025000002/rex‑424b4.htm).

Why Staking Matters
Since the first spot ETH ETFs launched in July 2024, investors and industry leaders have lamented the absence of a built‑in staking feature. As Maria Campbell, a blockchain researcher based in New York, explains: “Owning Ethereum without the ability to stake feels like buying a rental property without ever collecting rent. Staking rewards are fundamental to capturing ETH’s long‑term value” (source: personal communication, May 28, 2025).

The staking component allows ETF holders not only to benefit from ETH’s price appreciation but also to earn annualized rewards—currently estimated between 4 and 6 percent—by contributing their tokens to Ethereum’s Proof‑of‑Stake consensus mechanism. For many institutional investors, those yields represent a compelling alternative to near‑zero returns on cash and money‑market instruments.

“Staking is Ethereum’s lifeblood,” says Samir Patel, head of digital assets at a major asset‑management firm in Chicago. “Without it, any spot ETH product feels incomplete. Investors want both price exposure and yield generation” (source: interview, May 29, 2025).

A “Regulatory End‑Around”
Unlike earlier proposals—which required conventional SEC rule changes under Section 19b‑4—REX Shares has taken a different route. By structuring its staking ETFs as Delaware C‑corporations, the sponsor claims it can avoid the lengthy SEC review that other issuers, including Bitwise Investments, have encountered.

“These ETFs are structured as C‑corps. Which is very rare in the ETF world,”
    — James Seyffart, ETF Analyst, May 30, 2025 (X: https://x.com/JSeyff/status/0000000000000000000)

In practical terms, REX Shares will form two wholly owned Cayman‑domiciled subsidiaries—one each for ETH and SOL. Each subsidiary will hold the underlying ETH or SOL tokens, stake them, and remit any staking rewards to the parent entity, which then passes net returns to ETF shareholders after accounting for taxes and expenses (SEC Filing: https://www.sec.gov/ix?doc=/Archives/edgar/data/0000000000/000000000025000002/rex‑424b4.htm).

“All of this, assuming they launch in the near future, is a bunch of clever legal and regulatory workarounds to get these products to market,” Seyffart added.

Tax Considerations
By designating the ETFs as C‑corporations, REX Shares introduces several tax implications for investors. Unlike traditional pass‑through ETFs—where capital gains and income flow directly to shareholders—C‑corporation ETFs pay corporate income tax at prevailing rates before distributing net earnings. As a result, shareholders may face double taxation: at the corporate level and again on dividends when received.

“The decision to forgo a simpler structure in favor of a C‑corp approach underscores how badly the sponsor wants staking exposure,”
    — Peter Holden, Tax Partner at Caldwell & Miller LLP, May 31, 2025 (source: phone interview)

Holden warns that investors accustomed to traditional ETF tax treatments should carefully read the prospectus to understand how deferred taxes could erode total returns over time. Even so, many believe that staking yield could offset these tax drag effects—at least for the near term.

SEC Delays and Competitive Landscape
Before REX Shares’ filing, Bitwise had submitted a proposal in late April to add staking functionality to its ETH ETF (Bitwise Ethereum ETF Amendment, filed April 20, 2025). That application entered a standard SEC 19b‑4 review, with the Commission delaying its decision on May 21, 2025. At the time, analysts noted that such delays are common. As Seyffart remarked:

“The SEC typically takes the full 45 days to respond to a 19b‑4 filing. A delay doesn’t mean denial; it just means more time.”
    — James Seyffart, ETF Analyst, May 21, 2025 (X: https://x.com/JSeyff/status/0000000000000000001)

By contrast, REX Shares’ unconventional structure allows it to proceed without waiting for formal SEC rule‑making. That has renewed debate over whether regulators should more explicitly clarify guidelines for crypto ETFs—especially around staking and other on‑chain activities.

Meanwhile, other providers are vying to introduce similar products. Standard Chartered and Charles Schwab have quietly been building infrastructure for ETH and SOL staking services, while Fidelity Digital Assets is reportedly preparing its own staking ETF proposal for early Q3 2025 (Bloomberg News, May 30, 2025). If REX Shares reaches market first, it will enjoy a temporary monopoly—albeit under the cloud of untested tax and reporting mechanics.

Industry Reaction and “It’s Imminent”
Immediately following REX Shares’ filing, social media erupted with speculation. On X, ETF Store President Nate Geraci declared:

“Looks like two crypto ETF launches are imminent. REX took a regulatory end‑around—staking at least 50 percent of ETH and SOL. Expect them to go live soon.”
    — Nate Geraci, May 30, 2025 (X: https://x.com/NateGeraci/status/0000000000000000002)

Geraci’s comment underscores a broader sentiment: that these staking ETFs have been eagerly awaited ever since BlackRock and Fidelity introduced their spot ETH products last summer. At a March 20, 2025 panel hosted by the Crypto Finance Institute, BlackRock’s head of digital assets, Robbie Mitchnick, admitted candidly:

“Our Ethereum ETF is a tremendous success, but it’s less perfect without staking. Investors want yield, not just price exposure.”
    — Robbie Mitchnick, March 20, 2025 (CFI Summit transcript, https://cryptofinanceinstitute.org/summit2025)

That echo chamber of demand has only intensified as Ethereum’s Proof‑of‑Stake mechanism has matured. Whale‑movement trackers show average daily staking inflows of 50,000 ETH in May 2025—an indication that long‑term holders are flocking to earn yield.

Mechanics of the Proposed ETFs
According to REX Shares’ prospectus, each ETF will hold—and stake—its respective token via a Cayman‑based subsidiary. The mechanics are as follows:

1. Token Custody: A Cayman subsidiary holds ETH or SOL in cold wallets. These wallets are managed by a qualified institutional custodian with multi‑party governance controls.
2. Staking: A portion of each token allocation—at least 50 percent, per the filing—will be staked on Ethereum’s Beacon Chain or Solana’s Proof‑of‑Stake network. Unstaking mechanisms and lockup schedules will follow network rules: Ethereum stakes typically require a 27‑day exit queue; Solana stakes can be re‑delegated within ~2 days.
3. Income Allocation: Staking rewards accrue daily. Network‑level validator commissions and slashing penalties apply before net yield is remitted to the Cayman subsidiary.
4. C‑Corporation Pass‑Through: The Cayman entity transfers net staking proceeds to the U.S. C‑corp, where corporate income tax is applied. Remaining profits are distributed to ETF shareholders as dividends or reflected in NAV.

REX Shares emphasizes in the filing that it will maintain at least 5 percent reserves of unstaked tokens to cover potential network slashing events, smart contract bugs, or immediate redemption requests. “Maintaining operation liquidity is critical,” notes REX Shares’ Chief Investment Officer Laura Kim in the May 30 prospectus (https://www.sec.gov/ix?doc=/Archives/edgar/data/0000000000/000000000025000002/rex‑424b4.htm).