- According to reports, the SEC’s decision on the staking request in Grayscale’s Ethereum Trust ETF is expected to be made before May 26, 2025.
- This comes soon after the Cboe BZX Exchange submitted a similar proposal requesting staking approval in the 21Shares Core Ethereum ETF.
Recently, it was reported that the NYSE Arca has submitted an application to the U.S. Securities and Exchange Commission (SEC) for approval to engage in staking activities in the Grayscale Ethereum Trust ETF and the Grayscale Ethereum Mini Trust ETF.
Soon after submission, the regulator acknowledged the receipt, as featured in our recent coverage. SEC also highlighted a rule change that could permit Grayscale’s Ethereum ETFs to stake the underlying asset through various trusted providers.
According to our information, this staking process is expected to be managed only by the ETF’s sponsors. In doing so, the staked ETH would be effectively supervised and ensured that it is not pooled with other entities. Meanwhile, Coinbase Custody would secure its ETH holdings and maintain the existing security framework.
According to reports, the SEC has until May 26, 2025 to make a decision on this proposal. Within the period, there will be an initial 45-day decision timeline where a review will be conducted. This would include a public comment period, henceforth, the timeline is subject to extension to 90 days.
This proposal follows a recent disclosure that the Cboe BZX Exchange has equally filed a proposal to seek staking approval in the 21Shares Core Ethereum ETF. As mentioned in our previous blog post, Bloomberg ETF analyst James Seyffart recognized this as the first-ever application by an ETF for Ethereum staking.
Previous Discussion on Staking, Ethereum (ETH) Reacts to Current Development
The discussion surrounding staking has become a big deal due to its past challenges. Earlier, former SEC chair Gary Gensler cautioned that cryptos that stake their coins could pass the Howey Test and be recognized as securities. Per that report, staking has many similarities with lending. Meanwhile, crypto lending was required to be registered with the SEC. Fortunately, there seems to be a significant shift of interest towards staking under the new US administration.
Confirming this, Fox Business journalist Eleanor Terrett recently disclosed that the Agency has requested a memo containing information on the different types of staking and their benefits.
According to a source who recently spoke with the SEC, the agency is “very, very interested” in staking, even asking the industry for a memo detailing the different types of staking and their benefits. This source expects to see some kind of agency guidance on staking in the near future as it’s a topic they’re engaging enthusiastically on. Last week, staffers from the Division of Trading and Markets took part in a staking webinar with some industry players, as I reported on Friday.
Following this development, the price of ETH surged by 1% on the 24-hour price chart. However, its weekly gains remain 7.8% down while its 30-day returns also decline by 19%. At press time, ETH was trading at $2.49k. According to our recent analysis, the asset could stage a rebound to hit $7k this cycle.
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