REX-Osprey seeks SEC approval for BNB staking ETF, following Solana fund route

REX Shares, in partnership with Osprey Funds, filed an N-1A registration statement with the Securities and Exchange Commission late Tuesday in a bid to manage what could be the first spot BNB exchange-traded fund in the United States, including a staking component.

The proposed fund seeks to offer direct exposure to the price of BNB, the native cryptocurrency of the BNB Chain, a blockchain ecosystem originally developed by Binance. According to the filing, the ETF would trade on Cboe BZX Exchange, custody its BNB holdings with an unnamed crypto custodian and may delegate staking to third-party validators, including those in which affiliates of REX Advisers hold nominal ownership stakes.

The product intends to stake a significant portion of its BNB holdings, potentially enhancing yield for investors through staking rewards earned on the BNB Chain. It would process share creations and redemptions in cash, rather than in-kind. However, it may also interact with liquid staking protocols that issue tradeable staking derivatives, enabling access to staking yield while preserving liquidity.

BNB is used to pay transaction fees, participate in governance, and secure the BNB Chain through delegated proof-of-stake validation. Although the network is positioned as decentralized, the filing notes Binance's continued influence over validator operations and governance. The fund will seek to maintain liquidity by ensuring no more than 15% of its net assets are classified as illiquid, given BNB's seven-day unbonding period.

Other asset managers, such as Bitwise, Grayscale, Franklin Templeton, and VanEck, are also seeking the SEC's green light for several spot crypto ETFs, including products focused on XRP, Solana, Dogecoin, Cardano, Avalanche, Hedera, Litecoin, and Polkadot. The flurry comes amid a new era for the agency under the pro-crypto Trump administration, with expectations that it will offer a friendlier ear than in the previous Biden administration.

Following the Solana staking ETF route to approval

The proposed REX-Osprey BNB staking ETF could go live as early as Nov. 9, according to Bloomberg ETF analyst James Seyffart, following the quicker alternative route to SEC approval used to launch the REX-Osprey Solana staking ETF.

On July 2, REX‑Osprey launched the first U.S. ETF offering SOL exposure with native staking rewards under the Investment Company Act of 1940 (the "'40 Act"), rather than the more common Securities Act of 1933 (’33 Act) route used by spot Bitcoin and Ethereum ETFs. While not a standard spot ETF under the 1933 Act, the fund holds actual SOL — at least 50% directly staked — with the rest allocated to staking vehicles such as exchange-traded products and liquid staking tokens.

While not a direct comparison, the REX-Osprey product has failed to gain the same traction compared to the U.S. Bitcoin and Ethereum ETFs, attracting $161.7 million worth of net inflows in its first two months, according to data compiled by The Block. In contrast, the U.S. spot Bitcoin ETFs added $5.1 billion, while Ethereum funds accumulated $9.1 billion during the same period.

The BNB staking ETF is also registered as a '40 Act open-end management investment company under Form N-1A, distinguishing it from physically-backed '33 Act crypto trusts under an S-1 registration. It is structured to gain exposure to BNB both directly and via a wholly owned Cayman subsidiary, enabling tax-efficient staking while meeting regulated investment company requirements under U.S. tax law.

The REX-Osprey product is not the first BNB staking ETF proposed in the U.S., with VanEck previously filing for a similar fund in May, albeit via the traditional '33 Act route.