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Highlights
- US SEC extends review period for Grayscale's Ethereum ETF staking proposal.
- Commission will make decision by June 1, 2025, instead of original April 17 deadline.
- NYSE Arca filed the rule change request on February 14, 2025.
The U.S. Securities and Exchange Commission (SEC) has pushed back the time to decide on a proposed rule change to enable staking within Grayscale’s Ethereum spot ETF products.
The proposal, under which the ETFs would earn extra yield by staking their Ethereum positions, was originally submitted by NYSE Arca on Feb. 14, 2025, and made available for comment in the Federal Register on March 3, 2025.
SEC Designates Longer Period For Grayscale Ethereum ETF Proposal
According to a notice released on April 14, 2025, the SEC has designated a longer period to take action on NYSE Arca’s proposal to amend the rules governing the Grayscale Ethereum Trust ETF and Grayscale Ethereum Mini Trust ETF.
The SEC’s decision comes after Grayscale filed 19b-4 for the Hedera ETF with the US SEC. The original 45-day review period would have concluded on April 17, 2025, but the SEC has now extended this deadline to June 1, 2025.
In its notice, the Commission stated it “finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.” The notice also mentioned that the SEC has received no public comments on the proposed rule change to date.
The SEC’s decision to extend the review period is a standard procedural move that gives the Commission additional time to evaluate the proposal thoroughly. Under Section 19(b)(2) of the Securities Exchange Act of 1934, the SEC has the authority to extend its review period from the standard 45 days to up to 90 days if it “finds such longer period to be appropriate and publishes its reasons for so finding.”
SEC’s Approval May Enable Grayscale To Join PoS
If approved, the proposal would be important to Ethereum ETFs because it would allow Grayscale products to become part of Ethereum’s proof-of-stake system. Staking means locking ETH so that the network is safe and runs smoothly, and in return, users get rewards. For ETF investors, this would mean making extra money aside from the appreciation in Ethereum’s price.
Grayscale’s Ethereum Trust ETF and Ethereum Mini Trust ETF already hold Ethereum but do not earn staking yield. The rule change under consideration would alter the way these funds work.
The Commission must decide either to approve the proposal to amend the rule, disapprove it, or institute a procedure to determine if the proposal should be disapproved by June 1, 2025. This deadline is consistent with the SEC’s conservative stance on the investment product of cryptocurrency.
If passed, the rule revision would potentially create a precedent for other Ethereum ETF issuers who may apply for similar relief for their funds. The determination could also give insight into the SEC’s evolving position on proof-of-stake involvement using regulated investment products. Grayscale had previously sought a Litecoin ETF from the SEC and an XRP ETF from the NYSE in January.
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