- SEC postpones staking decision for Grayscale’s Ethereum Trusts until June 1.
- In-kind redemptions for Bitwise and WisdomTree ETFs also delayed.
- Ether price trades below $2,000 amid low investor response.
The U.S Securities and Exchange Commission (SEC) has postponed its ruling on whether to allow staking features in Grayscale’s proposed spot Ethereum ETFs. This was a decision expected this month but has been moved to June 1.
Also, the regulator is pushing back its decision on related crypto ETF proposals. This includes in-kind redemptions for funds that are offered by Bitwise and WisdomTree. These delays come amid ongoing regulatory hesitance that is surrounding staking in publicly traded investment vehicles.
SEC Holds Off on Staking Decision
According to a notice dated April 14th, the SEC extended the review period for Grayscale’s Ethereum Trust (ETHE) and Ethereum Mini Trust (ETH). They both seek to include staking as part of their offerings. The proposed rule change that was submitted by NYSE Arca in February would enable ETF investors to stake Ether and receive yield. This is similar to how individual holders earn rewards on exchanges like Coinbase and Kraken.
The annual yield on staked ETH varies between platforms. It ranges from 2.4% on Coinbase to 7% on Kraken. At the same time, adding staking to ETFs could have a chance to increase fund appeal. However, the SEC is yet to authorize such a mechanism in any crypto-based ETF product.
This delay comes even before a week is over since the SEC approved options trading for several spot Ether ETFs. Large capital from asset managers and firms including BlackRock, Bitwise and Grayscale are now eligible to offer derivatives trading. This signals a partial regulatory green light for more complex crypto products.
Broader Regulatory Hesitation and Global Comparison
The SEC’s hesitation highlights its broader concerns over staking as a regulated financial service. Since Ethereum’s full transition to a proof-of-stake consensus model, U.S regulators have been evaluating whether staking constitutes a securities activity. This in return would subject it to stricter oversight.
Grayscale’s proposal is one of the first high-profile requests to integrate staking into a spot Ethereum ETF. This, therefore, makes it a potential benchmark for future fund designs. The decision could shape how other applications, such as those from 21Shares, VanEck, and Franklin Templeton, proceed with staking-related features.
Although regulators in markets like Canada, Hong Kong, and parts of Europe already permit staking in crypto ETFs, the SEC continues to operate independently. Bloomberg ETF analyst James Seyffart noted that the agency does not typically follow the pace set by international counterparts.
In addition to staking delays, the SEC is still reviewing applications related to in-kind redemptions for multiple Bitcoin and Ethereum ETFs, including those from WisdomTree and VanEck. Unless a decision is reached earlier, the final deadline for Grayscale’s staking feature remains set for October 2025
ETH Price Shows Little Reaction
As much as there are multiple regulatory developments, the ETH market response has been minimal. At now, ETH is trading under $2,000, way below its 52-week high of $4,112 and its all-time high of $4,866 that was recorded in November 2021. According to data from Sosovalue, net inflows have reached $2.28 billion since Ether ETFs were launched in 2024. This figure stands in contrast to Bitcoin ETFs, which have recorded $35.4 billion in inflows since January 2024.
The comparative lag in adoption has increased the pressure on ETF issuers to differentiate their products. Staking, in particular, is seen as a key feature that could boost returns and make Ether ETFs more competitive in the crypto investment space. Moving forward, the SEC is expected to issue a new decision on Grayscale’s staking proposal by June 1.
