SEC acknowledges 21Shares' proposal to permit staking on Ethereum ETF

The U.S. Securities and Exchange Commission acknowledged Wednesday afternoon a 19b-4 filing from Cboe BZX Exchange, on behalf of 21Shares, to seek comments with regards to permitting the staking of the ether held by the 21Shares Core Ethereum ETF.

If approved, the ETF would be able to generate additional returns on its ETH holdings, which could then be passed on to investors.

"The ether staked by the Sponsor on behalf of the Trust will consist exclusively of ether owned by the Trust," the filing said. "The Sponsor’s staking activities on behalf of the Trust will not constitute 'delegated staking' and will not form part of a 'staking as a service' offering."

Last week, NYSE Arca filed to permit staking for Grayscale’s Ethereum ETFs.

The SEC approved spot Ethereum ETFs last summer and many firms cut staking out of their registration statements. Under former Chair Gary Gensler, the SEC had previously said proof-of-stake tokens are securities. The SEC has taken a friendlier stance on crypto under the Trump administration and since created a crypto task force with plans to classify some tokens as "non-securities."

"Under the Trump administration, staking is likely to receive the necessary legal framework, paving the way for broader adoption, including participation by institutions," YouHodler Chief of Markets Ruslan Lienkha told The Block in December. "With such a framework in place, Ethereum is well-positioned to attract increased liquidity as it offers an additional yield-generating opportunity through staking."

Institutional ownership of Ethereum ETFs increased in the fourth quarter, according to the most recent 13F filings. Overall ETH ETF ownership jumped from 4.8% to 14.5%, while BTC ETFs ticked slightly down from 22.3% to 21.5%.