The U.S. Securities and Exchange Commission (SEC) has issued a warning to REX Shares and Osprey Funds regarding their proposed Ethereum and Solana collateralized ETFs. The SEC expressed concerns that these ETFs may not comply with the Investment Company Act's definition of an investment company and could fail to meet legal compliance standards. The companies had planned to stake at least 50% of their assets for additional income through a C-type corporate structure. The SEC highlighted procedural violations, noting that the registration statement became effective before addressing unresolved issues. The agency has requested a postponement of the statement's effectiveness and warned of potential enforcement actions if compliance is not achieved. REX Financial's General Counsel, Greg Collett, stated that the product launch will be delayed until SEC requirements are met. While a spot Ethereum ETF has been trading since July last year, the proposed Solana ETF faces additional regulatory hurdles.