NYSE seeks SEC approval for ETH staking in Grayscale ETFs

The New York Stock Exchange (NYSE) has filed a proposal with the U.S. Securities and Exchange Commission (SEC) to allow Grayscale to introduce Ethereum (CRYPTO:ETH) staking to its spot Ethereum exchange-traded funds (ETFs).

The proposal, submitted on behalf of asset manager Grayscale, seeks to amend the Grayscale Ethereum Trust ETF (ETHE) and the Grayscale Ethereum Mini Trust ETF (ETH) to permit staking.

If approved, Grayscale would be able to stake Ether (ETH), earning staking rewards that would be considered income for the funds.

However, Grayscale will not guarantee any specific level of return from staking.

The filing clarifies that "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."

Grayscale believes allowing the Trusts to stake their Ether would benefit investors by allowing them to earn additional Ether and improve the ETFs' ability to track returns related to holding Ether.

The company also argues that staking would enhance the spot Ether ETFs’ creation and redemption process.

Coinbase estimates the staking reward rate for Ether at 2.06%.

This filing follows a similar move by 21Shares and comes after the SEC had previously asked issuers to remove staking from their spot Ether ETF proposals before approval in July 2024.

Bloomberg ETF analyst James Seyffart suggests that the SEC could decide on the rule change by the fourth quarter of the year.

Jito Labs and Multicoin Capital have submitted a memorandum to the SEC Crypto Task Force, arguing that including staking as a feature in certain ETPs would benefit investors, more accurately reflect the benefits of native network assets, and enhance network security.

There is speculation that the SEC might adopt a more favorable stance on crypto-related staking under a future Trump administration.

At the time of reporting, the Ethereum (ETH) price was $2,678.39.