Ethereum ETF Staking Likely Soon as US SEC Acknowledges Cboe Filing

Highlights

The 21Shares Core Ethereum ETF (CETH) proposes a staking method that ensures Ethereum remains with a verified custodian.
Additionally, sponsors and affiliates of CETH are prohibited from acting as staking providers.
CETH’s direct staking model, which excludes external investor funds, addresses SEC's concerns.

The U.S. Securities and Exchange Commission (SEC) has acknowledged the 19b-4 filing by the Cboe exchange while seeking the approval of staking features in the 21Shares Core Ethereum ETF (CETH). This could be a welcome development as crypto ETFs were barred from staking under the SEC chairmanship of Gary Gensler, noting that it violated securities laws.

Will the US SEC Approve Ethereum ETF Staking?

Although, the US CFTC has acknowledged Ethereum as a “commodity”, the US SEC has yet to clearly state its position on ETH, whether it’s a security or a commodity. During the approval of the spot Ethereum ETF last year, the SEC had its own contentions over approving the staking feature.

One of the major concerns the securities agency had was that the service provider i.e. crypto exchange would operate and promote staking as “an investment product” while guaranteeing a certain rate of return. The agency believed that this operating method was unclear and that the investor protection measures were insufficient.

The question here is what has changed now with the SEC, which is that 21Shares is applying for a staking facility on its Ether ETF. Will the Cboe application manager circumvent SEC regulations?

Here’s How CETH Plans to Offer Staking Facility

The 21Shares Core Ethereum ETF (CETH) is staked by entrusting it to a custodian i.e. staking provider and no ETH will be moved from the wallet during the staking period. Moreover, CETH affiliates and sponsors won’t be able to become staking affiliates.

CryptoQuant analyst Mignolet has emphasized the importance of enhancing transparency in exchange staking services to address concerns surrounding fund safety and operational clarity. “If we choose an unrelated provider to increase transparency and avoid moving funds from the custodian’s wallet, we can eliminate unnecessary risks like hacking or the illegal use of customer funds,” he stated.

Staking Ethereum Directly

Furthermore, the 21Shares Core Ethereum ETF (CETH) will directly stake Ethereum held by the company itself and does not involve Ethereum collected from external investors for staking. This distinction is a crucial factor in assessing the risks associated with exchange staking, according to Mignolet.

“Exchange staking is fundamentally a service, but it poses significant risks for individuals staking on these platforms,” Mignolet stated. The analyst further underscored the SEC’s stance on the matter, noting, “As the SEC pointed out, platforms should not promote or guarantee specific returns from staking.”

As the CETH filing addresses all these issues, there won’t be major hurdles in the SEC approval, stated the analyst. Earlier in February, Cboe also submitted an application for the trading of options on spot Ether ETFs.

Ethereum ETF Inflows Continue

Despite the strong crypto market turbulence in February, the Ether ETF inflows have remained healthy with BlackRock’s ETHA leading. On Wednesday, the net inflows stood at $19 million, with Fidelity’s FETH leading with $24.5 million in inflows.

As of press time, Ethereum price is trading 2% up at $2,745 amid a broader crypto market recovery. On the other hand, the Ethereum network transaction fee has dropped to just $0.41 hitting a four-year low.

TAGS
Ethereum ETF

Recommended
Price Analysis

Best Crypto Presales To Invest In September 2025 – Top Upcoming Presale Tokens

Best Crypto AI Trading Bots In 2025

Top Meme Coins To Buy In September 2025

Bhushan Akolkar

Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets.   He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.

Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.

Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.