Ethereum Investors Left Waiting as SEC Postpones ETF Staking Ruling
The U.S. Securities and Exchange Commission (SEC) has deferred its decision on Grayscale Investments’ proposal to allow staking for its Ethereum-based Exchange-Traded Funds (ETFs), the Grayscale Ethereum Trust ETF (ETHE) and the Grayscale Ethereum Mini Trust ETF (ETH).
The SEC announced an extension of the review period, setting a new decision date for June 1, 2025, with a final deadline in October 2025.
NYSE Arca filed its proposal on Feb. 14, 2025, and it was published in the Federal Register on March 3, 2025.
The plan seeks to allow these ETFs to stake Ethereum (ETH) to earn rewards, a feature already available in markets like Hong Kong, Canada, and Europe.
Also read: Goldman Sachs Bets Big on Bitcoin & Ethereum ETFs
The delay is in line with the SEC’s cautious approach to crypto-related financial products. Recently, the agency has also extended reviews for proposals from issuers like VanEck and WisdomTree concerning in-kind redemptions for Bitcoin and Ethereum ETFs, with decisions now due in early June 2025.
U.S. Investors Lose Edge as Ethereum ETF Rewards Wait
The SEC’s delay could affect investors’ enthusiasm for Grayscale’s Ethereum ETFs, as staking offers potential annual yields of 2% to 7%, depending on platforms like Coinbase and Kraken.
Since their debut in 2024, Ethereum ETFs have pulled in $2.28 billion in cumulative net inflows, per SoSoValue, a testament to their strong demand.
Spot ETH ETF net inflow (Source: SoSoValue)
Staking could provide additional returns and help the ETFs compete better with foreign counterparts that already offer such features.
Under Grayscale’s proposal, staking would be managed solely by the sponsor, with Coinbase Custody securing ETH holdings to maintain existing safeguards.
Also read: Will ETH Hit 10K? Examining Its Potential
However, regulatory uncertainty continues, with debates over whether staking qualifies as an investment contract potentially complicating approval.
As a result, U.S. investors cannot access staking rewards through these ETFs, which may drive capital toward global markets offering greater flexibility.
Will Staking Unlock U.S. Crypto ETFs’ Potential?
The SEC’s decision will set the stage for cryptocurrency ETFs in the United States.
Approval could align domestic offerings with global standards, promoting innovation and boosting investor returns.
Further delays or denial could, however, affect the development of ETH-based financial products.
As the regulatory landscape changes, stakeholders are awaiting clarity on how staking will be integrated in the United States, balancing innovation with regulation.
