TLDR:
- Grayscale and NYSE Arca met with the SEC’s Crypto Task Force on April 21, 2025
- Grayscale seeks approval to add staking capabilities to its Ethereum ETFs (ETHE and ETH Mini)
- Over $61 million in staking rewards have been missed by U.S. Ethereum ETPs due to current regulations
- Grayscale proposes a “point-and-click” staking model that maintains asset custody
- The SEC has postponed its decision until June 1, 2025, under new Chair Paul Atkins
Grayscale Investments is making a case to the U.S. Securities and Exchange Commission (SEC) to allow staking capabilities in its Ethereum exchange-traded funds (ETFs). The asset manager met with the SEC’s Crypto Task Force on April 21, 2025, to discuss updating the Form 19b-4 filings for both the Grayscale Ethereum Trust ETF (ETHE) and Grayscale Ethereum Mini Trust ETF (ETH).
During the meeting, Grayscale highlighted the missed opportunities for investors due to current regulatory limitations. The company pointed out that U.S.-based Ethereum ETPs now manage over $8 billion in assets, with Grayscale’s funds making up nearly half of this amount.
The absence of staking capabilities has resulted in over $61 million in unrealized rewards that could have benefited investors. Grayscale stressed that Ethereum’s proof-of-stake (PoS) consensus mechanism offers a unique chance for investors to earn extra yield through network validation.
To address concerns about custody and security, Grayscale proposed a “point-and-click” staking model. This approach would allow staking while ensuring asset managers maintain full control over the custody of Ethereum tokens.
International Precedents
Grayscale’s proposal comes as other countries have already moved forward with similar initiatives. The company noted that Canada, Europe, and Hong Kong have approved staking functionalities within their Ethereum ETFs.
By referencing these international examples, Grayscale aims to persuade the SEC to update its regulatory framework to match global standards. These precedents show both the feasibility and benefits of incorporating staking rewards into traditional investment vehicles.
Regulatory Timeline
The SEC had originally set April 17, 2025, as the decision date for Grayscale’s staking proposal. However, the commission has extended its review period to June 1, 2025, to allow for a more thorough evaluation of the potential impacts.
This delay coincides with leadership changes at the SEC. Paul Atkins, a former commissioner known for his more crypto-friendly stance, has been appointed as the new SEC Chair.
Industry observers suggest that Atkins’ leadership could usher in more progressive regulatory approaches for digital assets. His appointment has raised hopes among crypto advocates that the SEC may be more open to innovation in the sector.
The proposed changes to Grayscale’s ETFs would enable the company to directly earn staking rewards, optimizing potential returns for investors. This would address a major gap in the current U.S. crypto investment landscape.
If approved, the decision could open doors for other ETF providers to offer similar features. The outcome is being closely watched by market participants as it could shape how institutional and retail investors engage with digital assets going forward.
Grayscale’s proposal emphasizes that their staking model aligns with both investor protection principles and the operational realities of proof-of-stake networks. The company argues that this balance makes the case for approval stronger.
The potential approval comes at a time when Ethereum continues to cement its position as the second-largest cryptocurrency by market capitalization. The blockchain’s transition to proof-of-stake in 2022 has made staking a core feature of its ecosystem.
For U.S. investors, the ability to access staking rewards through regulated ETF products would represent a major step forward in mainstream crypto adoption. It would eliminate many of the technical barriers that currently prevent average investors from participating in staking.
The SEC’s decision on June 1, 2025, will determine whether U.S. investors can finally access these staking benefits through regulated investment vehicles.
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