The U.S. SEC has acknowledged Nasdaq’s proposal to allow BlackRock’s Ethereum ETF to engage in staking, potentially setting the stage for broader adoption of reward-generating crypto investment vehicles.
On Tuesday, the U.S. SEC officially acknowledged a proposal by Nasdaq to permit staking for BlackRock’s iShares Ethereum Trust (ETHA). The move marks a significant regulatory step toward enabling spot Ethereum ETFs to participate in Ethereum’s proof-of-stake (PoS) network.
If approved, BlackRock would be able to stake the Ethereum held in its ETF. The rewards generated from staking could then be distributed to shareholders.
According to the SEC filing, these rewards would be treated as income for the trust and kept separate from external Ethereum assets. This segregation helps protect investors from unnecessary exposure.
45-Day Window for Decision, With Possible Extension
The SEC has the option to decide within 45 days of the proposal’s publication in the Federal Register. However, the commission has frequently exercised its authority to extend review periods for similar filings.
Previous applications from other asset managers, such as Bitwise and Grayscale, have seen such delays in recent months.
For instance, Bitwise submitted its rule-change request through NYSE Arca in April. Then, in May, the SEC extended its review period.
Similarly, Grayscale’s proposal was acknowledged by the SEC in February. However, the commission postponed its decision in April to allow for a more comprehensive evaluation.
While regulatory uncertainty has long been a hurdle for staking-related products, the SEC’s recent posture suggests a changing outlook. In its most recent communications, the agency has noted that staking services, when properly structured, may not necessarily constitute securities offerings.
This regulatory softening comes as institutional and retail investors seek income-yielding crypto assets, with staking often viewed as an essential feature for long-term Ethereum exposure.
Ethereum ETFs See Strong Inflows Despite Grayscale Outflows
According to data from CoinGlass, spot Ethereum ETFs have attracted $9.4 billion in net inflows since their debut. BlackRock’s ETHA leads the charge with $9.5 billion in assets under management. This figure reflects not only investor inflows but also gains from Ethereum’s recent price appreciation.
Meanwhile, the Grayscale Ethereum Trust (ETHE) has recorded $4.3 billion in net outflows. On the other hand, BlackRock’s ETHA has seen $9.72 billion in inflows since launch.
In a related move this week, the US SEC has approved in-kind creation and redemption for Bitcoin and Ethereum ETFs, reversing its previous stance.
Authorized participants can now convert crypto ETPs directly into underlying assets, avoiding the need for fiat exchanges. This change eliminates the selling pressure caused by cash-only redemptions. The SEC’s approval, led by Paul Atkins, marks a shift towards more flexible crypto regulation.
ETH Price Holds Ground Near $3,800
As of Today, Ethereum is trading around $3,800, a modest 0.4% dip over the previous 24 hours. The digital asset has surged 54% over the past month, driven by strong momentum across the altcoin space.
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