The landscape of US crypto exchange-traded funds (ETFs) is set to expand with the imminent debut of REX Shares and Osprey Funds' innovative offerings. These new ETFs, covering assets like XRP and prominent memecoins, are poised to introduce a distinct Registered Investment Company (RIC) structure, setting them apart from established pure spot products and previous corporate models.
A Novel Approach: The Registered Investment Company (RIC) Structure
Unlike pure spot Bitcoin and Ethereum ETFs or the initial C-corporation model of the Solana SSK ETF, REX-Osprey has opted for the RIC framework. This strategic choice allows the funds to primarily hold spot crypto assets while retaining the flexibility to utilize derivatives and invest in other ETFs as market conditions dictate. Operating under established investment company regulations rather than corporate tax structures, the RIC approach provides a unique blend of operational requirements, tax treatment, and regulatory oversight. It effectively carves a middle path between direct spot exposure and more structurally innovative solutions, though its initial rollout has seen some delays, including for the anticipated Dogecoin ETF (DOJE).
Navigating the Evolving Regulatory Environment
The introduction of these RIC-structured ETFs arrives as the Securities and Exchange Commission (SEC) actively works towards establishing a standardized listing framework for crypto ETFs. This broader initiative aims to streamline approvals by eliminating individual rule-change requests for assets meeting specific criteria like market capitalization and trading volume, moving towards a standard 75-day S-1 review process. The SEC has notably delayed other ETF conversions, such as those from Bitwise and Grayscale, to prevent premature launches that could complicate future regulatory precedents. While widespread altcoin ETF approvals, potentially in large batches, are anticipated around October, the long-term performance, fees, and tax implications of REX-Osprey’s hybrid RIC structure remain an area of keen observation compared to more straightforward spot products.
