SEC Delays Decision On Staking For Grayscale’s Ethereum ETFs

The US Securities and Exchange Commission (SEC) has announced a delay in its decision regarding the approval of staking for Ethereum ETFs from asset manager Grayscale. This setback comes as the SEC awaits the confirmation of pro-crypto commissioner Paul Atkins, whose appointment has yet to be finalized.

SEC Postpones Staking Approval On Ethereum ETFs

On February 14, 2025, NYSE Arca, Inc. submitted a proposed rule change to the SEC, seeking to amend the listing and trading rules for Grayscale’s Ethereum Trust ETF and Grayscale Ethereum Mini Trust ETF to allow staking. 

The proposal was published for public comment on March 3, 2025. Under the Securities Exchange Act of 1934, the SEC is required to act on such proposals within 45 days, although it can extend this period for good cause. 

The original deadline for the SEC’s decision was April 17, 2025, but the Commission has now extended this timeframe to June 1, 2025, to allow for a thorough evaluation of the proposal.

In a parallel move, Fox journalist Eleanor Terret reported that the SEC is also delaying its decision on whether to permit WisdomTree and VanEck to conduct in-kind creations and redemptions for their Bitcoin and Ethereum spot ETFs until June 3, 2025. 

As reported by Terret, the in-kind process allows for direct exchanges of the underlying assets—Bitcoin and Ethereum—rather than converting them into cash, which was previously mandated by the SEC under Gary Gensler’s leadership. 

New Era For Crypto?

Atkins’ delayed arrival at the SEC is partly due to procedural steps that require President Trump’s approval and a formal swearing-in. While this sign-off is expected to occur soon, it has left the agency in a state of transition, with implications for the future of crypto regulation.

However, this shift in regulatory approach signals a potential turning point for the cryptocurrency industry. Under Gensler’s tenure, the SEC was criticized for its stringent, enforcement-heavy stance towards cryptocurrency, which stifled innovation and created uncertainty for many market participants. 

Conversely, the anticipated arrival of Atkins, known for his pro-crypto perspective, may herald a new era of more favorable regulatory conditions.

Atkins’ position could pave the way for the approval of numerous altcoin ETFs filed by various asset managers, aimed at providing broader exposure to cryptocurrencies like XRP, Cardano, and Solana. 

ETH, the second largest cryptocurrency on the market, is trading at $1,630 on Monday, up 6% on a weekly basis. On longer time frames, the token is still down 15% after the sell-off in February and March that saw the price of ETH drop towards $1,380.

Featured image from DALL-E, chart from TradingView.com