**SEC Considers Grayscale’s Ethereum ETF Staking Proposal; Decision Anticipated by May 26, 2025**
The U.S. Securities and Exchange Commission (SEC) is currently evaluating a proposal from Grayscale that seeks to incorporate staking within its Ethereum Exchange-Traded Funds (ETFs). If granted approval, this initiative could pave the way for staking rewards to be included in Grayscale’s Ethereum Trust ETFs. The SEC has initiated a 45-day review period, which may extend to 90 days, with a final decision expected by May 26, 2025. This move aligns with a growing trend of regulatory engagement with cryptocurrency-based financial products.
**Grayscale’s Proposal for Staking in ETFs**
Grayscale submitted its proposal through NYSE Arca on February 14, 2025, aiming to enable staking within both the Grayscale Ethereum Trust ETF and the Grayscale Ethereum Mini Trust ETF. The proposal outlines that the ETFs would stake Ethereum through verified providers while ensuring that the staked assets are kept separate from pooled staking services. Coinbase Custody will continue to safeguard the Ethereum holdings, adhering to established security protocols. The SEC has recognized the filing and has opened a public comment period as part of its review process. The agency’s decision will hinge on factors such as investor protection measures, regulatory compliance, and whether staking could be classified as an investment contract under securities law.
In March 2024, Grayscale initially sought approval for a similar staking model, inspired by Fidelity’s approach, but encountered delays due to regulatory complexities. This current review signifies a renewed effort to incorporate staking rewards into regulated investment products.
**The Evolving Regulatory Landscape and SEC’s Stance on Staking**
The SEC’s perspective on staking has shifted in response to growing institutional interest. Traditionally, the agency has closely examined staking under securities law, particularly concerning platforms that offer staking as a service. However, recent developments suggest a potential change in regulatory attitudes. Crypto journalist Eleanor Terrett noted on X that the SEC has become “very, very interested” in staking and has been consulting with industry experts for further insights. This heightened interest may also impact ongoing legal cases, including the SEC’s lawsuit against Consensys regarding its MetaMask staking service.
As reported by Ethnews, the SEC has also acknowledged a similar staking proposal from 21Shares for its Core Ethereum ETF (CETH). This indicates that the agency is becoming more receptive to allowing staking within regulated investment vehicles, provided that adequate investor protection measures are implemented. The 21Shares model ensures that Ethereum is held by a verified custodian and that staking is conducted in compliance with securities regulations.
**Grayscale’s Expanding Crypto ETF Portfolio**
In addition to its Ethereum initiatives, Grayscale has also filed for a spot Cardano (ADA) ETF, further diversifying its offerings in the cryptocurrency investment space.
