U.S. SEC Delays Decision on Grayscale Ethereum ETF Staking

The United States Securities and Exchange Commission (SEC) has postponed its decision on a proposed rule change that would allow Grayscale’s spot Ethereum exchange-traded funds (ETFs) to participate in Ethereum’s staking process. The change would enable these ETFs to engage in Ethereum’s proof-of-stake validation system while maintaining existing custody protections.

Notably, NYSE Arca applied for regulatory approval on February 14, and the SEC acknowledged it nearly two weeks later.

SEC Delays Decision

According to a letter dated April 14, the SEC has extended the deadline to June 1 to decide on Grayscale’s Ethereum Trust ETF and Grayscale Ethereum Mini Trust ETF’s participation in Ethereum staking. The move gives the regulator more time to decide whether to approve the proposal, allowing the funds to stake Ethereum or begin the formal review process.

To understand the proposal’s significance, it’s essential to grasp how staking works. Staking involves locking up cryptocurrency to help validate transactions on networks like Ethereum, enhancing their security. In return, participants typically earn Ethereum tokens.

The SEC’s decision to delay its ruling on NYSE Arca’s staking proposal comes amid a volatile period for the cryptocurrency market. Over the past month, the market has seen a 3% loss in total value, with Ethereum’s price dropping by 15%, now at $1,640, according to CoinGecko.

Possible Approval of Ethereum ETF Staking?

While it remains unclear whether the extension hints at a potential rejection of the staking proposal, the SEC has become more crypto-friendly under President Donald Trump’s administration. Last week, Paul Atkins, a pro-digital assets chairman, was appointed, and several past cases against crypto firms like Coinbase, Ripple Labs, and Kraken have been dismissed.

Building on this trend, Bloomberg analyst James Seyffart has predicted that the SEC will likely approve the staking request for spot Ethereum ETFs by the end of 2025. Earlier this month, the SEC approved Ethereum ETF options, signaling that approval for staking might be on the horizon.

In a social media post, Seyffart addressed the growing interest in Ethereum ETF staking approval timelines. He suggested that approval could come sooner than expected but noted that the final decision deadline is at the end of October.