Cryptocurrency asset management firm Grayscale Investments recently met with the U.S. Securities and Exchange Commission (SEC) to discuss the potential introduction of staking functionality into Ethereum-based exchange-traded products (ETPs). The crypto market is speculating that this meeting could also influence the approval of ETFs tied to other coins, such as Solana.
According to foreign reports on the Apr 29th, Grayscale and NYSE Arca met with the SEC’s Crypto Task Force on the 21st to present a proposal for adding staking to the ‘Grayscale Ethereum Trust ETF (ETHE)’ and the ‘Grayscale Ethereum Mini Trust ETF’.
Staking is a method of earning rewards by holding a specific cryptocurrency for a set period and participating in network operations. This structure is possible on blockchains that operate on a proof-of-stake (PoS) mechanism, such as Ethereum or Solana. Similar to stock dividends, it allows investors to earn additional income beyond just price appreciation.
Currently, staking is not permitted within Ethereum ETFs in the U.S. However, it has already been implemented in overseas markets, including Canada, Europe, and Hong Kong.
Grayscale argued that the current structure prevents investors from accessing over $61 million in potential earnings and urged the SEC to modernize its regulatory framework to align with global standards.
The firm also proposed a ‘point-and-click’ staking model designed to ensure both investor convenience and asset security. Under this model, the asset manager would maintain full control over Ethereum token custody while minimizing risks associated with staking operations.
The SEC was originally expected to decide on the proposal by the 17th of this month but extended the review period to June 1. This timing coincides with the expected appointment of Paul Atkins, a former SEC commissioner known for his pro-crypto stance, as the new chairman. Experts anticipate a more flexible approach to digital asset regulation under Atkins’ leadership.
