The U.S. Securities and Exchange Commission (SEC) is currently reviewing a proposal from Grayscale to incorporate staking into its Ethereum Exchange-Traded Funds (ETFs), with a final decision expected by May 26, 2025. The proposal, filed by NYSE Arca on February 14, 2025, seeks approval for staking activities within both the Grayscale Ethereum Trust ETF and the Grayscale Ethereum Mini Trust ETF.
The SEC has acknowledged the proposal, which would allow Grayscale’s Ethereum ETFs to stake Ethereum through trusted providers, earning staking rewards without altering the current custody structure. The staking process would be managed solely by Grayscale, ensuring that staked ETH is not pooled with assets from other entities or marketed as a staking service. Coinbase Custody would continue to secure the ETF’s Ethereum holdings under the current security framework.
The review includes a public comment period, with a decision timeline of 45 days, potentially extending up to 90 days. If approved, this move could offer Ethereum ETF investors staking rewards as an added feature.
Grayscale has been exploring the addition of staking to its Ethereum ETFs since March 2024, following a similar initiative by Fidelity. However, regulatory challenges have delayed approval. The SEC has expressed concerns about whether staking constitutes an investment contract under U.S. securities laws but is actively engaging with industry players to better understand the various forms of staking.
In related news, the SEC has recently approved a similar proposal from 21Shares for staking within its Core Ethereum ETF. Grayscale is also seeking approval for a spot Cardano (ADA) ETF, expanding its crypto ETF offerings beyond Bitcoin and Ethereum.
As the SEC continues its review, the outcome could set a precedent for how staking is integrated into regulated investment products. Investors and industry participants are closely monitoring the situation, particularly given the SEC’s evolving stance on crypto-related regulations.
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