"Dogecoin ETF Dodges SEC Delays, Rides 1940 Act to First-Mover Glory"

The REX-Osprey Dogecoin ETF (ticker: DOJE), set to debut on U.S. markets on September 11, 2025, is poised to become the first exchange-traded fund to hold Dogecoin, a cryptocurrency initially created as a joke. The fund is structured under the Investment Company Act of 1940, bypassing the prolonged regulatory process typically required for spot crypto ETFs. This structure allows the fund to sidestep the lengthy SEC review and exchange rule-change process, which is traditionally applied to traditional ETFs using the Securities Act of 1933 framework.

The 1940 Act framework introduces additional investor protections and regulatory compliance measures, which are more rigorous than those required under the 1933 Act. The DOJE fund is required to hold a portion of its assets in other regulated securities, which provides a degree of diversification and reduces exposure to Dogecoin alone. This structure is viewed by some as a more secure investment vehicle compared to the traditional commodity-style grantor trusts used for Bitcoin ETFs.

Ganesh Mahidhar, an investment professional at Further Ventures, emphasized that ETFs regulated under the 1940 Act are subject to broader governance requirements and diversification mandates. This regulatory approach, he explained, demarcates DOJE as more akin to stock and bond ETFs than the commodity-style Bitcoin ETFs. Mahidhar also noted that Dogecoin follows the proof of work consensus mechanism, similar to Bitcoin, and thus possesses a "floor" in terms of the energy consumed in its production. This is in contrast to other cryptocurrencies like Shiba Inu and Pepe, which operate on proof of stake and lack a similar baseline, making them more vulnerable due to their perceived lack of utility.

The launch of DOJE also highlights a broader trend in the crypto market. As of the time of the DOJE’s launch, over 90 crypto ETF proposals were pending SEC decisions, including applications for Solana and XRP funds. REX Shares, the sponsor of the DOJE ETF, had also filed for multiple other crypto ETFs in January 2025, including those tracking Dogecoin and other speculative assets. These filings came shortly after Gary Gensler, the former SEC Chair, left the agency.

For investors, the DOJE ETF presents a new way to access Dogecoin without the technical and security challenges associated with holding the cryptocurrency directly. The fund is designed to be traded like any other stock or ETF, and it is expected to list on a U.S. stock exchange, making it accessible to a broad range of investors through standard brokerage accounts. However, the convenience of the ETF comes with certain limitations. For instance, the fund’s structure introduces an expense ratio and potential tax drag compared to direct ownership of Dogecoin. Additionally, the DOJE ETF does not offer the same 24/7 trading flexibility that direct crypto ownership provides.

Despite these limitations, the DOJE ETF has generated significant investor interest, with Dogecoin’s price rising by 13–17% in the week leading up to the fund’s launch. This surge in demand is attributed to the heightened anticipation of the ETF’s debut, signaling strong market confidence in the product. The fund is expected to be distributed by Foreside Fund Services and is backed by a team that previously launched a Solana Staking ETF using a similar regulatory approach.

From a regulatory perspective, the DOJE ETF represents a strategic innovation in navigating the complex landscape of crypto-related investment products. By using the 1940 Act framework, the ETF sidesteps the political and regulatory delays that have plagued many other crypto ETF applications. This approach has provided REX Shares and Osprey Funds with a clear first-mover advantage in the U.S. market. Analysts suggest that this regulatory shortcut may pave the way for more memecoin and crypto ETFs in the future, though the speculative nature of these assets remains a critical risk factor for investors.