Grayscale Requests SEC Approval to Integrate Staking in Ethereum ETPs

Highlights:

• Investment company Grayscale submitted updated documents requesting the SEC’s approval for ETH ETPs’ staking.
• The asset manager said staking will enhance Ethereum’s network’s overall outlook.
• It also mentioned that US Ethereum ETFs have forfeited about $62 million due to staking restrictions.

Representatives from crypto investment firm Grayscale recently met with members of the US Securities and Exchange Commission (SEC) to request staking permission on its Ethereum Exchange Traded Products (ETPs).

Grayscale intends to change the details of its 19b-4 application to include provisions for staking on Ethereum ETFs. The investment company argued that US-based Ethereum ETPs’ valuation has soared to about $8.1 billion. Hence, the regulatory body should allow staking on these products similar to other regions.

Grayscale met with the U.S. SEC’s Cryptocurrency Task Force on April 21 to apply for amendments to its 19b-4 Form filings for the Grayscale Ethereum Trust ETF (ETHE) and Grayscale Ethereum Mini Trust ETF (ETH) to allow the relevant funds to participate in staking activities.…

— Wu Blockchain (@WuBlockchain) April 28, 2025

Staking Significance on Ethereum ETPs

The asset management firm noted that staking will boost the overall outlook of the Ethereum network, allowing shareholders to earn more income. Grayscale also noted that Ethereum ETFs lost about $61 million in rewards between their launch and February 2025 due to the staking restriction.

The investment firm added that the forfeited amount does not include daily rewards compounding. “Instead, such rewards have gone to non-US ETH ETPs and other non-ETP stakes,” the asset manager stated.

The asset manager also highlighted plans to make investors’ funds available even with locked-staked ETH. Grayscale said it would establish a liquidity sleeve, holding extra ETH for paying investors. In addition, the investment firm mentioned that borrowing from trusted partners could be an option. It also noted plans to establish a revolving credit facility to cover redemption risks during unstaking periods.

GRAYSCALE URGES SEC TO APPROVE ETHEREUM STAKING FOR ETFs

Grayscale has called on the SEC to approve staking for Ethereum ETFs, warning that U.S. investors are missing out on $61M in rewards due to the current ban.

Grayscale, which manages $8.1B, argues that staking will… pic.twitter.com/ziCi6nigQ2

— Crypto Town Hall (@Crypto_TownHall) April 28, 2025

Grayscale Calls for Regulations Adjustment

Beyond requesting staking approvals on all US ETH ETPs, Grayscale emphasized the need to modify existing regulations to accommodate staking. “Currently, spot ETH ETPs do not represent the underlying ETH completely because they are not currently permitted to engage in staking,” the asset manager added.

Grayscale cited regions that permit staking, including Europe and Canada. The asset manager argued that these nations allow ETH ETP staking without negatively impacting the market. In addition, it suggested that the US can draft its regulations to mirror Europe and Canada’s staking laws.

Grayscale spoke about its experience managing investment funds, including those with tricky liquidity. It also highlighted its strong partnerships with leading global crypto firms, citing them as unique features that make it ideal for staking.

In conclusion, Grayscale highlighted how it intends to address risks, including taxation and slashing. According to the investment company, its operational safeguards and custody arrangements, especially with Coinbase, would help circumvent these risks.

SEC Delays Its Decision on ETH ETP Staking

On April 15, Crypto2Community reported that the US regulatory watchdog delayed its decision to approve Grayscale’s ETH ETP staking proposal from April 17 to June 1. However, the final decision remains at the end of October 2025.

In related news, Grayscale launched two new Exchange-Traded Funds (ETFs), Grayscale Bitcoin Covered Call ETF (BTCC) and Grayscale Bitcoin Premium Income ETF (BPI), on April 2. The asset manager said investors will generate income from these funds by capitalizing on Bitcoin’s (BTC) volatile nature. In addition, Grayscale noted that these two funds boast features unique for investors seeking low-risk projects.