As the decision on US Ethereum exchange-traded funds (ETFs) is approaching, BlackRock, Grayscale, and Bitwise amended their applications with the Securities and Exchange Commission (SEC) yesterday (Wednesday), removing the provisions for staking.
No Staking Yields for Ether ETFs
Staking allows Ethereum holders to earn yield on their holdings, a feature of proof-of-stake cryptocurrencies. Ethereum holders need to lock in their holdings for a set period to support the blockchain operations in exchange for the reward.
However, the SEC sees staking as an illegal offering by cryptocurrency platforms, as the service can be seen as the offering of unregistered securities. The regulator even took action against many cryptocurrency platforms for offering staking to their US customers.
In its amended 19b-4 forms, BlackRock noted: “Neither the Trust, nor the Sponsor, nor the Ether Custodian [...] nor any other person associated with the Trust will, directly or indirectly, engage in action where any portion of the Trust’s ETH becomes subject to the Ethereum proof-of-stake validation or is used to earn additional ETH or generate income or other earnings.”
CNBC is already talking about a Solana ETF. This is the problem with including ETH into the spot ETF game. They’ve opened Pandora’s box of shitcoins.Looks like we’re about to have the free market casino everyone’s begged for. I’ll stick to #Bitcoinpic.twitter.com/e2FOQaxtgc
— The ₿itcoin Therapist (@TheBTCTherapist) May 22, 2024SEC’s Decision Looms
The three companies' amendments came ahead of the Thursday deadline, before which the US regulator must decide whether to approve or disapprove VanEck and ARK Investments/21Shares' Ether ETF proposals.
Meanwhile, the three prospective Ethereum ETF issuers were not alone in staking skepticism. Earlier this week, Fidelity dropped staking plans in its amended S-1 forms. VanEck, Franklin Templeton, Invesco Galaxy, and ARK 21Shares also dropped the staking from their filings. However, Hashdex has yet to amend its filing.
The SEC greenlighted the listing of 11 Bitcoin ETFs on American exchanges in January. However, it is still delaying its decision on Ether ETFs.
The tides turned earlier this week when senior Bloomberg analyst Eric Balchunas raised the odds of approval of a Bitcoin ETF from 25 percent to 75 percent. His decision was based on the political pressure faced by the SEC to decide on the Ether ETFs.
Furthermore, reports came out that the SEC asked Nasdaq, CBOE, and NYSE to amend their applications for Ether ETFs.
This article was written by Arnab Shome at www.financemagnates.com.
