As a seasoned crypto investor, I’ve witnessed firsthand the evolving landscape of digital asset investment vehicles. Grayscale’s decision to remove staking from its Ethereum ETF plan is a prudent move in my opinion. The regulatory uncertainty surrounding staking and other Proof-of-Stake (PoS) mechanisms has led many issuers to err on the side of caution.
As an analyst, I’ve noticed that Grayscale Investments has made a modification to its Ethereum ETF plan. In the initial proposal filed last week, Grayscale suggested enabling staking for investors through the trust. However, in an updated preliminary proxy statement submitted on Tuesday, this proposed option has been taken out. Therefore, Grayscale no longer intends to offer staking as part of its Ethereum ETF product at this time.
Grayscale Drops Staking from Ethereum ETF Plan
In the revised proxy document, Grayscale explained that the main objective of Amendment Number 2 was to eliminate Proposal 2. This proposal originally contained provisions for staking, a feature now absent from their updated filing. Grayscale’s decision follows similar actions taken by other issuers, including Fidelity, which omitted staking rewards in its S-1 registration statement filed earlier on Tuesday.
James Seyffart, an analyst at Bloomberg specializing in ETFs, anticipated Grayscale’s move. In a recent post on platform X, Seyffart expressed his expectation that Grayscale would eliminate staking language when filing to transform $ETHE into an ETH-based ETF.
In October, Grayscale initiated the process to transform the Grayscale Ethereum Trust into an exchange-traded fund (ETF) that tracks the price of ether, by submitting a Form 19b-4 to NYSE Arca. This move comes on the heels of their accomplishment in converting the Grayscale Bitcoin Trust into a spot Bitcoin ETF earlier this year, following a court decision and Securities and Exchange Commission (SEC) approval in January.
Ether ETF Filings Revised Amid SEC Input
Grayscale’s proposal to drop staking is in line with a wider pattern among Ethereum ETF applicants. Lately, the Securities and Exchange Commission (SEC) has asked Nasdaq and the Chicago Board Options Exchange (CBOE) to revise their spot Ethereum ETF applications. This active engagement from the SEC has fueled anticipation about the possible approval of these financial instruments.
In response to feedback from the Securities and Exchange Commission (SEC), Cboe and five other issuers – Fidelity, VanEck, Invesco/Galaxy, Ark/21Shares, and Franklin Templeton – have made necessary amendments to their 19b-4 filings. These adjustments are crucial as the deadlines for both issuers and exchanges to revise their applications are fast approaching. While VanEck and Cboe’s application is up against a final deadline this Thursday, it’s important to note that the spot ether exchange-traded funds (ETFs) can only begin trading once the SEC approves the issuers’ S-1 forms as well.
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2024-05-22 03:06