Nomura to Launch High-Yield Ether ETF Featuring Staking Options

Laser Digital, a subsidiary of Nomura Holdings Inc., is set to launch a high-yield Ether ETF before September.

The new fund has been launched with the support of Galaxy Digital and crypto startup Dinero and is designed to give institutional investors access to Ethereum staking, which is one of the components that other US-issued ETFs have excluded in order to gain regulatory approval.

Nomura to Launch High-Yield Ether ETF

A recent report suggests that Nomura Holdings’ crypto arm is planning to release an ether ETF with staking feature giving higher returns than the current Ether ETFs available in the market. The launch which is expected to happen in early September is being done in partnership with Galaxy Digital and Dinero.

Sebastien Guglietta, the head of asset management at Laser Digital, noted that the fund offers institutional investors the opportunity to access both the price appreciation potential of Ether and the additional returns from staking.

This comes amid the recently launched Ether ETFs that did not incorporate staking because of the laws against it.

Institutional Focus and Strategic Partnerships

Laser Digital’s new fund focuses on accredited investors and this includes hedge funds and private investment offices and not the retail clients. This is in line with the nature of the product and the legal perspective in the market.

The fund has been designed to target institutional investors and provide access to ETH and the income from staking, which can improve the overall return on investments.

Galaxy Digital will be the sole validator operator and will be in charge of validating Ethereum transactions, guaranteeing that the staking process is efficient and secure. Dinero is also giving the software technology that is needed in order to stake and generate yield. This partnership works best as each of the partners brings in their strength of financial services, technological support and legal compliance.

Staking Excluded from US Issued ETFs

There is no staking in the existing Ether ETFs due to the position of the SEC. The SEC’s concern is that the staking mechanism falls under the definition of a security especially under the Howey Test. According to the SEC, staking could be considered an investment contract, which means that it is subject to securities laws. This is because staking requires users to lock their Ether with the hope of getting returns, which the SEC argues is akin to selling an investment contract.

This exclusion was more of a tactical decision by issuers such as Fidelity and Blackrock in order to get the approval of the regulators. The SEC’s decision to approve Ether ETFs followed a more cautious approach compared to the approval of Bitcoin ETFs. The Ether ETFs that have started trading in the market recently have not included the staking option thus meeting the required standards by the SEC. 

However, the SEC has not shared much information on the exact factors that led to the approval, but most in the industry think that the removal of staking and products related to it were decisive.

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