SEC considers 21Shares' staking proposal for Ethereum-ETF
SEC considers 21Shares' staking proposal for Ethereum-ETF
The U.S. Securities and Exchange Commission has acknowledged a 19b-4 filing from Cboe BZX Exchange on behalf of 21Shares, proposing to permit staking of ether held within the 21Shares Core Ethereum-ETF.
The filing outlines a plan to generate additional returns from the ETF’s ETH holdings, which could then be passed on to investors. Notably, the proposal specifies that the ether staked by the trust will consist exclusively of assets owned by the trust itself, thereby distinguishing it from delegated staking or staking-as-a-service models that have drawn regulatory scrutiny in the past.
Implications for crypto regulation
This development occurs amid a broader regulatory recalibration in the crypto sector. Under former SEC Chair Gary Gensler, the agency had classified proof-of-stake tokens as securities, a stance that limited staking activities within crypto ETFs. However, the current administration, influenced by a more crypto-friendly approach under former President Trump, has seen the SEC create a new crypto task force with plans to reclassify some tokens as “non-securities.” Faryar Shirzad, Coinbase’s chief policy officer, and industry voices like YouHodler’s Ruslan Lienkha have long argued that granting the CFTC full authority over spot markets and allowing staking could spur greater institutional participation by providing additional yield opportunities for digital asset investments.
Institutional interest in Ethereum-ETFs has notably increased in recent quarters. According to recent 13F filings, overall ETH ETF ownership surged from 4.8% to 14.5%, while Bitcoin-ETF ownership experienced a slight decline. As regulators work to balance investor protection with fostering innovation, the SEC’s willingness to consider staking for ETH ETFs marks a potential turning point that could reshape digital asset management and boost market liquidity.
The coming months will be critical as the SEC reviews this proposal and as lawmakers and industry stakeholders monitor the evolving regulatory landscape, which may ultimately set new standards for crypto asset management.
