SEC Considers Grayscale’s Ethereum Staking Proposal Amid Regulatory Changes

Grayscale Investments and NYSE Arca met with the SEC to propose adding staking to their Ethereum ETPs. The proposal suggests a user-friendly staking model while emphasising the missed rewards for U.S. investors. The SEC’s decision has been delayed to June 2025, amid speculation that new SEC leadership could lead to more favourable crypto regulations. Grayscale aims to leverage international precedents to push for modernisation of the regulatory framework in the U.S.

Grayscale Investments, in collaboration with NYSE Arca, recently engaged with the U.S. Securities and Exchange Commission (SEC) to discuss a proposal aimed at integrating staking into their Ethereum exchange-traded products (ETPs). This meeting, which took place on April 21, 2025, involved significant discussions with the SEC’s Crypto Task Force concerning the Grayscale Ethereum Trust ETF (ETHE) and its Mini Trust counterpart, the Grayscale Ethereum Mini Trust ETF (ETH).

Grayscale stressed the importance of enabling staking within Ethereum investment products in the United States. They highlighted the benefits of Ethereum’s proof-of-stake (PoS) consensus mechanism, which offers investors a chance to earn additional returns through participation in network validation. It’s notable that U.S.-based Ethereum ETPs manage upwards of $8 billion in assets, and Grayscale’s offerings constitute nearly half of this sum. They pointed out a glaring omission regarding staking, noting that investors have missed out on over $61 million in unrealized rewards, presenting a real missed opportunity for enhanced returns.

The model proposed by Grayscale features a user-friendly “point-and-click” staking mechanism. This is designed to be straightforward for investors while ensuring strong asset custody. According to Grayscale, asset managers would maintain complete control over Ethereum token custody, which helps reduce custodial risks commonly linked with staking. They contend that such a framework not only protects investors but also aligns well with the operational requirements presented by PoS networks.

Initially, the SEC was expected to announce its decision on the Ethereum staking proposal by April 17, 2025. However, this timeline has been extended to June 1, 2025. The additional delay aims to allow for a thorough consideration of the prospective effects tied to incorporating staking in ETPs. This postponement aligns with the appointment of Paul Atkins as the new SEC Chair, who is recognised for holding a more crypto-friendly viewpoint. Many analysts believe his leadership could yield more progressive regulatory measures for cryptocurrencies.

In their discussions, Grayscale pointed out that various international regions, including Canada, Europe, and Hong Kong, have already made advancements by approving staking functionalities within Ethereum ETFs. They assert that these instances underscore the practicality and advantages of embedding staking rewards in traditional investment channels. By highlighting these global examples, Grayscale aspires to encourage the SEC to adapt its regulatory approach to be more in tune with international standards.

The decision the SEC ultimately makes is likely to drastically influence the landscape of crypto investment products in the United States. Should the proposal receive approval, it could open the door to a wider array of staking-enabled offerings, which might change how both institutional and retail investors interact with digital assets.