#Crypto Market Pullback# SEC has done something very rare: It has issued a negative opinion on ETF applications for two altcoins!

SEC officials expressed a negative opinion regarding two new altcoin ETFs that are intended to be launched using a different method.
In the US, an initiative that could be groundbreaking for the launch of exchange-traded funds based on cryptocurrencies by offering (ETF) staking rewards has faced regulatory uncertainties.

Two new Ethereum and Solana-focused ETFs planned to be launched by REX Financial and Osprey Funds have raised new questions about the legal status of the funds, even though they received the initial registration approval from the SEC.
The SEC stated that the funds in question may not comply with the definition of an "investment company" under federal securities laws. This means that the funds fail to meet one of the essential legal requirements needed for trading on the exchange.

SEC officials, in a letter sent to the fund issuer named ETF Opportunities Trust, indicated that the registration of two ETFs as an "investment company" may have been done incorrectly and that the disclosures made could be misleading. These funds aimed to allow investors to earn staking rewards in cryptocurrencies like Ethereum and Solana.
REX Financial Chief Legal Counsel Greg Collett stated in his comments on the matter, "We believe we can address the SEC's concerns regarding the definition of an investment company, and we do not plan to launch the funds until this issue is resolved." The SEC, on the other hand, refused to comment on the content of the letter.

Bloomberg Intelligence ETF analyst James Seyffart stated, "Even if the SEC does not allow the listing of this structure, we believe that ETF initiatives with a simpler structure that include staking will ultimately be successful. It is just a matter of time. However, the SEC seems to be quite displeased with REX's method of advancing these applications quickly."
This was the SEC's second public intervention in recent months regarding ETFs that invest in alternative asset classes. In March, the SEC publicly criticized the world's first ETF investing in the private credit market, which was offered by State Street Corp. and Apollo Global Management, just hours after it began listing.
REX announced yesterday that it has received "effective registration" for the two ETFs in question, and the funds can now be traded on the exchange. Greg King, the founder of REX, mentioned that both funds are planned to be launched in mid-June.

The SEC stated in its letter, "Unless these concerns are addressed, appropriate steps will be considered to ensure compliance with federal securities laws."
IT IS NOT INVESTMENT ADVICE