US SEC Reviews Grayscale Ethereum ETF Staking Proposal Decision

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Is the SEC Finally Getting Cozy with Crypto? 🤔💰

So, the U.S. Securities and Exchange Commission (SEC) is taking a long, hard look at a proposal that could let Grayscale’s Ethereum Exchange-Traded Fund (ETF) do some staking. And by “long, hard look,” I mean they’ll probably take their sweet time and make a decision by May 26, 2025. Because who doesn’t love a good cliffhanger? 🎢

This riveting filing was submitted by NYSE Arca on February 14, 2025. Yes, Valentine’s Day! Nothing says “I love you” like regulatory approval for staking activities in the Grayscale Ethereum Trust ETF and the Grayscale Ethereum Mini Trust ETF. 💌

US SEC Acknowledges Grayscale’s Staking Proposal

According to the latest gossip from the filing, the SEC has acknowledged this proposed rule change. This would allow Grayscale’s Ethereum ETFs to stake Ethereum through trusted providers. So, basically, they can earn staking rewards without messing up the existing custody arrangements. Because who wants to deal with that drama? 🙄

And get this: the staking process will be managed solely by the ETF’s sponsor. So, no pooling with other entities or marketing it as a staking service. Coinbase Custody will keep the fund’s Ethereum holdings safe and sound, like a digital Fort Knox. 🔒

The SEC’s review includes a public comment period, which is just a fancy way of saying they want to hear what everyone thinks. They’ve got an initial 45-day decision timeline that could stretch to 90 days. If they give it the green light, we might see staking rewards as a shiny new feature for Ethereum ETF investors. 🎉

Regulatory History and Industry Considerations

Grayscale has been trying to add staking to its Ethereum ETF for a hot minute. Back in March 2024, they proposed a similar structure after Fidelity jumped on the bandwagon, but regulatory red tape put the brakes on that plan. 🚦

The SEC has had its concerns about staking, especially whether it counts as an investment contract under U.S. securities laws. But recent reports suggest they’re actually talking to industry folks to get the scoop on the different forms of staking and their benefits. Who knew the SEC could be so social? 🤷‍♀️

Eleanor Terrett, a journalist, spilled the tea on X (formerly Twitter) that the SEC is showing a “very, very interested” stance on staking. They’ve been asking industry experts for their two cents. 💬

She said:

“Given the SECGov’s newfound interest in staking, it seems logical that it will also reconsider its lawsuit against Consensys, which it sued last year over its @MetaMask staking service. The SEC also alleged Consensys had been operating as an unregistered broker, the same claim it’s now dropping against Coinbase.”

Market Developments and Grayscale’s Cardano ETF

The SEC’s acknowledgment of Grayscale’s Ethereum staking proposal comes at a time when they’re also accepting a similar proposal from 21Shares for staking in its Core Ethereum ETF. It’s like a crypto party, and everyone’s invited! 🎊

Plus, the SEC is now reviewing Grayscale’s filing for a spot Cardano (ADA) ETF. If they give it the thumbs up, investors can get a taste of Cardano without having to hold the asset directly. It’s like having your cake and eating it too! 🍰

Meanwhile, the SEC has decided to drop its investigation into Robinhood’s crypto unit and the Uniswap exchange. It’s like they’re cleaning house and shifting their regulatory approach. Who knows how this will affect their views on staking within ETFs? 🧹

As the SEC’s review process unfolds, investors and industry insiders are glued to their screens, waiting for updates. The decision timeline includes that initial 45-day period, which could stretch to 90 days. Because why rush when you can savor the suspense? ⏳

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2025-02-26 08:02