How Grayscale Pressures SEC to Approve Ethereum ETF Staking

3h ago•

bullish:

bearish:

Grayscale Investments has formally urged the U.S. Securities and Exchange Commission (SEC) to permit staking within Ethereum exchange-traded products (ETPs), a shift that could unlock millions in rewards and fortify Ethereum’s blockchain infrastructure.

In a Washington meeting, Grayscale’s Chief Legal Officer Craig Salm, along with other representatives, presented their request for revisions to the SEC’s Crypto Task Force for Grayscale’s ETHE and ETH ETF filings. The updated proposal opens Ethereum funds’ participation in Ethereum staking just as other firms in Europe and Canada operate with this feature.

Grayscale Highlights $61 Million in Lost Ethereum Rewards

Grayscale Urges SEC to Approve Ethereum ETF Staking

Craig Salm valued the chance to speak with the SEC Crypto Task Force about changing rules as the crypto market grows.He said, we appreciate the opportunity to engage with the Securities and Exchange Commission’s Crypto Task Force.

Grayscale reported during the meeting that ETH investments worth $8.1 billion in the United States have lost potential rewards valued at $61 million because these products did not participate in staking activities. Grayscale emphasized:

“ETH ETPs have foregone approximately $61 million as a result of not being able to participate in staking from launch through February 2025, not including daily compounding of rewards. Instead, such rewards have gone to non-US ETH ETPs and other non-ETP stakers.”

Grayscale Outlines Staking Benefits for Ethereum

Grayscale explained how staking supports ETH with advantages that extend past profits. The firm believed enabling ETH ETPs to stake would let them act as network validators that maintain the blockchain’s security and performance improvement.

ETH ETP shareholders can gain more returns from staking while making the Ethereum blockchain stronger according to the filed memo.

The company adopted multiple ways to protect investors from withdrawal issues that somehow come with staking practice. The plan contains 3 parts to handle liquidity smoothly: it sets up a Liquidity Sleeve, allows temporary finance access from custodians and lenders, and starts a revolving credit pool for unstaking periods.

Grayscale Highlights Gaps in Spot ETH ETPs

Grayscale Urges SEC to Approve Ethereum ETF Staking

Grayscale developed solutions to manage tax problems and network penalties that put validators at risk. The firm believes that established custody solutions primarily from Coinbase Custody will control these risks successfully. The memo noted:

“Currently, spot ETH ETPs do not represent the underlying ETH completely, because they are not currently permitted to engage in staking.”

The company asked the SEC to adopt global practices since overseas markets have integrated staking capabilities while preserving trading quality. Our firm showns how traditional financial systems and our existing digital asset connections let us introduce staking properly in U.S. ETH ETPs.

Conclusion

Grayscale’s push to enable staking for Ethereum ETFs marks a pivotal step toward aligning U.S. crypto regulations with global standards. The company uses new rewards features along with better security and risk tools to help improve ETH investment products while keeping America’s digital asset lead in the new market.