SEC ETF News: Ethereum Staking ETF Filings Encounter Regulatory Hurdles

The U.S. Securities and Exchange Commission (SEC) has postponed decisions on new Ethereum staking ETF filings, citing ongoing regulatory uncertainty around staking mechanics, fund structure, and investor protection. These delays affect major financial players like Grayscale, BlackRock, Fidelity, Franklin Templeton, and 21Shares, pushing final rulings into mid to late 2025 as the SEC works through complex compliance requirements.

Why Ethereum Staking ETFs Are Stuck in Regulatory Limbo

Concerns Over Investor Safety and Liquidity Timing

Staking locks up ETH for days or even weeks, but ETFs expect quick redemptions. That mismatch raises red flags for liquidity management, making the SEC cautious. Grayscale, for example, proposed a “liquidity sleeve” for redemption coverage and short-term financing for emergencies—but the SEC still delayed the decision to allow more evaluation time.

Structural Questions Around ETF Qualifications

Some proposals rely on unusual corporate structures that muddy ongoing compliance. REX Financial and Osprey Funds, for instance, used c-corp models that may violate the standard ETF framework under Rule 6c‑11.

Staking Viewed with Longstanding Scrutiny

The SEC has targeted staking before, particularly pooled staking. Kraken’s U.S. staking service was shut down after a $30 million settlement over unregistered securities violations. Similarly, Consensys faced charges for its MetaMask staking offerings.
This sets a cautious backdrop when ETFs attempt to integrate staking elements.

Timeline of Key Filing Delays and Extensions

| Issuer | Filing Feature | Original Decision Date | New Deadline |
|—————————|—————————|————————|———————|
| Grayscale (ETH Trusts) | Staking inclusion | May 2025 | June 1, with final by Oct 2025 |
| 21Shares (Core ETH ETF) | Staking feature | Mid‑2025 | Delayed into Summer |
| BlackRock (iShares ETH) | Staking integration | Sept 15, 2025 | Oct 30, 2025 |
| Fidelity & Franklin Templeton | Staking integration | Sept‑Oct 2025 | Nov 13, 2025 (Fid.) |
| Other altcoin ETFs | Solana, XRP, Dogecoin | Mid‑2025 | Delayed into late Q3/4 2025 |

Real-World Stakes: What’s at Play for Investors and Issuers

Revenue and Market Distinction

Staking yield is attractive. Grayscale estimates $61 million in lost rewards since launch, potentially growing to $5.5 billion over 10 years. That matters when competing with platforms in Canada and Europe that already offer staking ETFs.

Strategic Positioning in the ETF Race

Many issuers want to be first-to-market with a staking-enabled ETF. That includes BlackRock, which would gain a unique advantage if approved. But the SEC is setting a bar. Issuers are closely watching to see who crosses it first.

Expert Insight

“The SEC will take their time and move as fast or as slow as they want,” said James Seyffart, ETF analyst at Bloomberg Intelligence. He noted that regulators often ignore peer actions abroad, making approvals hard to predict.

Bloomberg analysts also suggest approvals could come between late June and July for some staking features, but final rulings may stretch into late 2025.

What Comes Next: Anticipated Outcomes

Continued Delays

Expect continued postponements into late 2025 as the SEC evaluates risk frameworks, liquidity structures, and compliance with ETF rules.

Industry Adaptation

Issuers might adapt filings, drop staking features, or propose new risk mitigations—as several did in earlier rounds to speed approvals.

Regulatory Clarity or Guidance

Pressure is building for the SEC to issue clearer paths—possibly via rule updates like Generic Listing Standards, which could simplify crypto ETF approvals.

Conclusion

Ethereum staking ETFs face delayed approval from the SEC due to complex concerns about liquidity mismatch, regulatory structure, and investor protection. Issuers like Grayscale, BlackRock, Fidelity, and others now face decision deadlines stretching into late 2025. Meanwhile, a first-to-market staking-enabled ETH ETF could gain a strategic edge—but only if regulators are satisfied that risks are sufficiently managed. Investors and issuers alike await clearer signals from the SEC on how staking can fit into compliant, liquid, and protective fund structures.

FAQs

Q: Why is the SEC delaying Ethereum staking ETF approvals?
A: Delays stem from concerns about liquidity management (staking lock-ups vs. ETF redemptions), unconventional fund structures, and long-standing SEC scrutiny of staking practices.

Q: When might these staking ETFs get approved?
A: While some decisions could come by mid-2025, many final rulings are delayed to late 2025, depending on issuer preparations and SEC comfort with compliance frameworks.

Q: Can issuers bypass staking issues by removing it from filings?
A: Yes. Some issuers previously removed staking features to align with SEC expectations and expedite approval, though that may diminish fund appeal.

Q: What stops the SEC from approving staking in ETFs?
A: Key hurdles include fund liquidity mismatch, uncertainty around asset custody and redemptions, and whether staking constitutes an unregistered securities activity.

Q: Could global trends influence the SEC?
A: While other regulators already allow staking ETFs, the SEC typically moves at its own pace. Issuers should prepare for detailed regulatory demands, not assume global approvals translate domestically.