The U.S. Securities and Exchange Commission (SEC) has extended the review period for a proposed rule change that would allow Grayscale’s Ethereum spot ETF products to participate in staking. Originally submitted by NYSE Arca on Feb. 14, 2025, the proposal aims to enable the ETFs to earn additional yield by staking their Ethereum positions. The SEC’s decision to designate a longer period for review comes after Grayscale filed for the Hedera ETF with the SEC under rule 19b-4. The original 45-day review period was set to end on April 17, 2025, but has now been extended until June 1, 2025, to give the Commission more time to evaluate the proposal thoroughly.
In its notice, the SEC stated that it has received no public comments on the proposed rule change to date, and the extension of the review period is a standard procedural move to allow for a more comprehensive evaluation. Under the Securities Exchange Act of 1934, the SEC has the authority to extend the review period for up to 90 days if deemed appropriate. If approved, the proposal would enable Grayscale’s Ethereum ETF products to participate in Ethereum’s proof-of-stake system, allowing investors to earn staking rewards in addition to potential price appreciation.
Grayscale’s Ethereum Trust ETF and Ethereum Mini Trust ETF currently hold Ethereum but do not participate in staking. The proposed rule change would alter the functioning of these funds and potentially set a precedent for other Ethereum ETF issuers to apply for similar relief. The decision by the SEC on this proposal could provide insights into the Commission’s evolving position on proof-of-stake involvement using regulated investment vehicles. Grayscale has previously sought approval for a Litecoin ETF from the SEC and an XRP ETF from the NYSE in January, indicating the company’s interest in expanding its product offerings in the cryptocurrency market.
As the SEC continues its review of the proposed rule change, investors in Grayscale’s Ethereum products are eagerly awaiting a decision that could potentially unlock new ways for them to earn additional returns on their investments. The extension of the review period until June 1, 2025, allows the SEC sufficient time to consider the implications of the proposal and make an informed decision. The outcome of this review could have far-reaching implications for the Ethereum ETF market and provide valuable insights into the regulatory environment for cryptocurrency investment products in the U.S. Financial markets.
