Capital management companies REX Advisors and Osprey Funds have applied to the U.S. Securities and Exchange Commission (SEC) to launch a Cardano cryptocurrency exchange-traded fund (ADA) with staking capabilities.
If approved, the product, called REX-Osprey ADA + Staking ETF, would be the first ADA-linked exchange-traded fund with built-in staking functionality in the U.S. market.
The Fund is intended to reflect the performance of the reference asset without incurring any associated fees or expenses. According to documents sent to the SEC, the structure of the ETF is as follows: Allows staking rewards to be reinvested into the fund itselfdiscounts fees for custodians and validators.
Staking, as defined by CriptoNoticias Cryptopedia, is the act of depositing virtual currency in a smart contract, wallet, or exchange in order to receive a profit. In the context of ETFs, staking means that the fund uses ADA to participate in transaction validation and generate additional rewards.
REX Advisers acts as an investment advisor and incurs normal operating expenses, excluding advisory fees, taxes, and transaction costs.
The proposal expects at least 80% of net assets to be invested directly in Cardano or products that deliver its performance. These include other foreign exchange traded funds that replicate or hold assets, such as 21Shares Cardano ETP (Switzerland), CoinShares Cardano Staked ETP (Germany), and Virtune Cardano Staked ETP (Sweden). The remainder may be allocated to liquid instruments or derivatives to optimize portfolio management.says the document.
The Fund also provides for the use of REX-Osprey ADA + Saking (Cayman) Portfolio SP, a Cayman Islands registered subsidiary that is fully managed by the Parent ETF. This structure seeks to maintain exposure to digital assets within the US regulatory framework under the Investment Company Act of 1940.
Operationally, the ETF may delegate the custody of its ADA holdings to a cryptocurrency service provider that performs verification on the Cardano network. The stock lock-in period is estimated to be approximately 10 days. During that period, Assets are not transferable and remain subject to market fluctuations.
The SEC must now review the application to determine whether the product meets registration requirements. before final approval and listing on the US market.
