tl;dr
The debut of five crypto ETFs from REX Shares and Osprey Funds is likely delayed to next week as they adopt a new registered investment company (RIC) structure, allowing flexibility in asset holdings. The SEC is working on a standardized listing framework for crypto ETFs, aiming to streamline appr...
**Crypto ETFs Set for Delayed Debut as SEC Shapes New Regulatory Framework**
The long-awaited debut of five crypto exchange-traded funds (ETFs) from REX Shares and Osprey Funds is likely to be pushed back to next week, according to insiders and analysts. These funds, which include exposure to Bitcoin, XRP, TRUMP, and BONK, are set to adopt a structure similar to their earlier Solana SSK ETF—a move that highlights the evolving regulatory landscape for digital assets.
### The REX-Osprey ETFs: A New Structural Approach
Unlike traditional spot crypto ETFs or the Solana ETF’s initial C-corporation setup, the REX-Osprey funds are leveraging a **registered investment company (RIC)** structure. This approach, explained by Bloomberg ETF analyst James Seyffart, allows the funds to hold spot crypto assets while retaining flexibility to use derivatives or invest in other ETFs when needed.
The RIC framework operates under established investment company regulations, distinct from the corporate tax structures of C-corporations. This setup offers a middle ground between pure spot exposure and structural innovation, balancing regulatory compliance with operational agility. However, it also introduces unique tax and distribution dynamics for investors, as noted by Seyffart: “The RIC approach provides a pathway to navigate regulatory hurdles without sacrificing the ability to adapt to market conditions.”
### SEC’s Regulatory Roadmap: Standardization on the Horizon
The REX-Osprey ETFs are entering the market as the SEC moves toward a **standardized listing framework** for crypto ETFs. This proposed system would eliminate the need for individual rule-change requests for qualifying assets, streamlining the approval process.
Recent developments underscore the SEC’s cautious approach. The agency recently issued stay orders on Bitwise’s $1.68 billion crypto index fund conversion and Grayscale’s Digital Large Cap Fund ETF transition, halting approvals just hours after granting them. Seyffart suggests the SEC is intentionally delaying conversions to avoid ETFs launching before finalizing comprehensive digital asset listing standards.
Under the new framework, ETF sponsors would submit registration statements on Form S-1 and undergo standard 75-day review periods, provided their underlying tokens meet criteria like market capitalization, trading volume, and liquidity. This shift could pave the way for a wave of approvals, as Seyffart predicted in April: “Batch approvals for over 90 ETF filings could materialize in October, including Solana, Litecoin, and XRP ETFs.”
### The Road Ahead for Altcoin ETFs
Meanwhile, the Dogecoin ETF (DOJE), initially slated for Sept. 12, has faced delays. Bloomberg’s Eric Balchunas anticipates DOJE could debut mid-week next week, potentially clearing the path for REX-Osprey’s funds to follow. However, the timing raises questions about how the REX-Osprey hybrid structure will fare in a market bracing for multiple altcoin ETF launches.
While the RIC framework offers immediate market access, it may come with trade-offs. Seyffart notes that the structure’s tax and fee arrangements could be less favorable compared to pure spot ETFs, which might influence investor adoption.
### Balancing Innovation and Regulation
As the SEC tightens its grip on crypto ETFs, the REX-Osprey funds represent a strategic pivot—leveraging regulatory flexibility while avoiding the pitfalls of uncharted territory. Their debut, delayed but inevitable, could signal a turning point in the industry’s quest for broader institutional acceptance.
For now, the crypto ETF landscape remains a chessboard of innovation and regulation. Whether REX-Osprey’s approach becomes a blueprint or a cautionary tale will depend on how well it navigates the SEC’s evolving standards—and how quickly investors embrace its hybrid model.
What do you think? Will the REX-Osprey ETFs redefine the crypto ETF space, or are they a temporary detour in the race for standardization?