🌎 SEC Opens Up to Ethereum Staking in ETFs

SEC’s New Stance on Ethereum Staking in ETFs

The Securities and Exchange Commission (SEC) has shown a willingness to reconsider the inclusion of stake as a component of spot Ethereum exchange-traded funds (ETFs). This shift in approach comes after President Donald Trump’s administration took office and Gary Gensler stepped down as SEC chair.

Ethereum ETF Filings and Staking

A recent filing by Cboe BZX Exchange on behalf of 21Shares for the 21Shares Core Ethereum ETF has reignited the discussion around staking in ETFs. The filing states that “the ether staked by the Sponsor on behalf of the Trust will consist exclusively of ether owned by the Trust.” This development is significant, as it suggests that issuers are once again exploring the possibility of including staking in their Ethereum ETF offerings.

Previously, the SEC had instructed prospective spot Ethereum ETF issuers to remove staking-related language from their applications, citing concerns that proof-of-stake tokens should be classified as securities and that staking services must register with the agency to operate legally.

A Shift in SEC’s Approach

The departure of Gary Gensler and the establishment of the Crypto Task Force by acting chair Mark Uyeda have marked a shift in the SEC’s approach to cryptocurrency regulation. The agency has recently met with industry stakeholders, including Jito Labs and Multicoin Capital, to discuss the inclusion of staking in Ethereum ETFs.

While the outcome of these discussions is unclear, the SEC has acknowledged at least two filings for public comment on whether to permit Ethereum staking in Wall Street ETFs. NYSE Arca has also proposed greenlighting staking in Grayscale’s Ethereum exchange-traded fund suite, indicating a renewed push for staking inclusion in regulated investment products.

Tips for Investors:

Keep an eye on SEC filings and announcements related to Ethereum ETFs and staking.
Understand the potential benefits and risks of staking in ETFs, including the impact on investment returns and regulatory compliance.
Stay informed about industry developments and regulatory changes that may affect your investment decisions.