The U.S. Securities and Exchange Commission has extended its timeline for deciding whether to allow Grayscale’s proposed Ethereum ETFs to participate in staking, adding to growing industry anticipation surrounding staking integration in publicly traded products.
In a notice issued on April 14, the SEC said it will now rule by June 1 on the request submitted by NYSE Arca on behalf of Grayscale Investments. The application, originally filed on February 14, seeks to amend the structure of the Grayscale Ethereum Trust ETF and Grayscale Ethereum Mini Trust ETF, enabling them to stake Ethereum and earn network rewards without altering their custody or redemption systems.
This move would mark a significant shift in how U.S.-regulated digital asset funds interact with Ethereum’s proof-of-stake (PoS) protocol, which offers passive returns in exchange for helping validate transactions and secure the blockchain.
New SEC Leadership, Same Regulatory Pace
The delay comes amid a leadership transition at the Commission, with Paul Atkins recently confirmed as the new SEC Chair. Known for his more industry-friendly outlook, Atkins’ appointment has sparked speculation that longstanding crypto policy—particularly around staking and ETFs—could evolve in the near term.
However, analysts remain cautious about reading too much into global precedent. While jurisdictions like Canada, the EU, and Hong Kong have already approved staking-based ETF structures, the SEC has historically resisted external influence on its regulatory timeline.
“They don’t care what other regulators are doing in my experience,” said James Seyffart, ETF analyst at Bloomberg Intelligence.
“They might learn from them, but they’ll go at their own pace.”
The SEC also faces a June 3 deadline to rule on in-kind redemption proposals from Bitwise and WisdomTree, which seek to enable non-cash redemptions in Ethereum ETFs—a complementary issue that could signal how far the agency is willing to push ETF innovation under new leadership.
Broader Market and Policy Headwinds Cloud Outlook
The timing of the delay aligns with a broader atmosphere of caution, as the SEC navigates crypto regulation against a backdrop of global economic and geopolitical stress. Ethereum has fallen roughly 15% in the last 30 days, currently trading near $1,640, while the overall digital asset market has shed more than 3% in value amid renewed volatility.
The SEC has previously flagged staking as a regulatory gray zone, particularly when paired with yield-generating investment products. While the process plays a critical role in Ethereum’s network security and functionality, its compatibility with securities laws remains under scrutiny.
Despite these uncertainties, the market continues to watch closely. The Grayscale staking proposal represents a potential turning point for institutional Ethereum products—especially if the SEC begins signaling broader acceptance of yield-bearing digital asset strategies.
Quick Facts
- The SEC has delayed its decision on Grayscale’s Ethereum ETF staking proposal until June 1, 2025.
- The ETFs would participate in Ethereum’s proof-of-stake mechanism while maintaining their existing custody model.
- New SEC Chair Paul Atkins may influence the Commission’s stance on staking-related ETF proposals.
- Ethereum is down 15% over the past month as geopolitical and market uncertainty weighs on sentiment.
