The U.S. Securities and Exchange Commission (SEC) is reviewing a proposal to allow staking in Grayscale\u2019s Ethereum Exchange-Traded Fund (ETF), with a decision expected before May 26, 2025.<\/p>\n
The filing, submitted by NYSE Arca on February 14, 2025, seeks regulatory approval for staking activities within the Grayscale Ethereum Trust ETF and the Grayscale Ethereum Mini Trust ETF.<\/p>\n
US SEC Acknowledges Grayscale\u2019s Staking Proposal<\/h2>\n
According to a filing<\/a>, the US SEC has acknowledged the proposed rule change, which would permit Grayscale\u2019s Ethereum ETFs to stake Ethereum through trusted providers. This would allow the funds to earn staking rewards without altering the existing custody arrangements.<\/p>\n According to the report, the staking process would be managed solely by the ETF\u2019s sponsor, ensuring that staked ETH is not pooled with other entities or marketed as a staking service. Coinbase Custody will continue securing the fund\u2019s Ethereum holdings, maintaining the current security framework.<\/p>\n The SEC\u2019s review includes a public comment period, with an initial 45-day decision timeline that could extend up to 90 days. If approved, the move could introduce staking rewards as an additional feature for Ethereum ETF investors.<\/p>\n Grayscale has been exploring the addition of staking to its Ethereum ETF<\/a> for some time. In March 2024, the company proposed a similar staking structure following Fidelity\u2019s initiative, but regulatory complexities delayed its approval.<\/p>\n The SEC has previously raised concerns about staking, particularly regarding whether it qualifies as an investment contract under U.S. securities laws. However, recent reports indicate that the agency is actively engaging with industry players to better understand the different forms of staking and their benefits.<\/p>\n Eleanor Terrett, a journalist, stated on X (formerly Twitter) that the SEC has shown a \u201cvery, very interested\u201d stance on staking and has been asking industry experts for additional insights.<\/p>\n She said\u2019<\/p>\n \u201cGiven the SECGov\u2019s newfound interest in staking, it seems logical that it will also reconsider its lawsuit against Consensys, which it sued last year over its @MetaMask staking service. The SEC also alleged Consensys had been operating as an unregistered broker, the same claim it\u2019s now dropping against Coinbase.\u201d<\/p>\n<\/blockquote>\n The SEC\u2019s acknowledgment of Grayscale\u2019s Ethereum staking proposal comes amid other crypto-related regulatory developments. The agency recently accepted a similar proposal from 21Shares for staking in its Core Ethereum ETF, suggesting a growing interest in integrating staking into regulated investment products.<\/p>\n Additionally, the SEC has started reviewing Grayscale\u2019s filing for a spot Cardano (ADA) ETF<\/a>. If approved, it would allow investors to gain exposure to Cardano without directly holding the asset. This filing is part of Grayscale\u2019s broader strategy to expand its cryptocurrency ETF offerings beyond Bitcoin and Ethereum.<\/p>\nRegulatory History and Industry Considerations<\/strong><\/h2>\n
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Market Developments and Grayscale\u2019s Cardano ETF<\/h2>\n
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