SEC Weighs Grayscale’s Bold Move: Staking in Ethereum ETFs on the Horizon?

Jakarta, Pintu News – The United States Securities and Exchange Commission (SEC) is currently reviewing a proposal to allow staking in Grayscale’s Ethereum Exchange-Traded Fund (ETF), with a decision expected to be announced before May 26, 2025.

The filing by NYSE Arca on February 14, 2025 aims to obtain regulatory approval for staking activities in the Grayscale Ethereum Trust ETF and Grayscale Ethereum Mini Trust ETF.

US SEC Recognizes Grayscale Staking Proposal

According to a filing, the US SEC has recognized the proposed rule change, which will allow Grayscale’s Ethereum (ETH) ETF to stake Ethereum through a trusted provider.

Read also: Grayscale to Launch Polkadot ETF Soon, Could DOT Price Surge to $34?

This will allow the fund to earn staking rewards without changing the existing custody settings.

According to the report, the staking process will be fully managed by the ETF sponsor, ensuring that the staked ETH is not bundled with other entities or marketed as a staking service. Coinbase Custody will continue to secure the fund’s Ethereum holdings, maintaining the existing security framework.

The SEC review includes a public comment period, with an initial decision time of 45 days that could be extended to 90 days. If approved, the move could introduce staking rewards as an additional feature for Ethereum ETF investors.

Regulatory History and Industry Considerations

Grayscale has long considered adding staking to its Ethereum ETF. In March 2024, the company proposed a similar staking structure following an initiative from Fidelity, but regulatory complexities delayed the approval.

The SEC has previously raised concerns about staking, particularly in relation to whether it meets the criteria of an investment contract under US securities laws.

However, recent reports suggest that the agency is actively communicating with industry players to understand the different forms of staking and their benefits.

Eleanor Terrett, a journalist, stated on X (formerly Twitter) that the SEC is showing immense interest in staking and has requested further insights from industry experts.

Read also: 3 Crypto Facing a Downturn by March 2025!

He said, “Given the SECGov’s renewed interest in staking, it seems reasonable that they would also reconsider their lawsuit against Consensys, which they sued last year over their @MetaMask staking service. The SEC also accused Consensys of operating as an unregistered broker, a charge that has now also been dropped against Coinbase.”

Market Development and Cardano Grayscale ETFs

The SEC’s recognition of Grayscale’s Ethereum staking proposal comes amid other crypto regulatory developments.

Recently, the agency received a similar proposal from 21Shares for staking in their Core Ethereum ETF, indicating a growing interest in integrating staking into regulated investment products.

In addition, the SEC is now reviewing Grayscale ‘s filing for a Cardano (ADA) spot ETF. If approved, this would allow investors to gain exposure to Cardano (ADA) without having to directly hold the asset. This filing is part of Grayscale’s broader strategy to expand their cryptocurrency ETF offering beyond Bitcoin and Ethereum.

Meanwhile, the SEC has halted investigations into Robinhood’s crypto unit and the Uniswap (UNI) exchange, signaling a change in their regulatory approach. These decisions could affect how the agency assesses staking in ETFs.

With the SEC review process underway, investors and industry stakeholders are closely monitoring the latest updates.

The term of this decision includes an initial period of 45 days, which can be extended to 90 days depending on regulatory considerations.

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Reference:

• CoinGape. US SEC Reviews Grayscale Ethereum ETF Staking Proposal Decision. Accessed on February 27, 2025.
• The News Crypto. Will the SEC Approve Grayscale’s Ethereum ETF Staking Proposal? Accessed on February 27, 2025.