Most of the Ether ETF issuers are removing the staking feature from their application as having it would conflict with the SEC’s securities laws.
By Bhushan Akolkar
Edited by Julia Sakovich
Updated
2 mins read
The excitement surrounding the spot Ethereum ETFs has surged recently as the US SEC shows greater involvement in deciding on its approval. Some of the top players like Fidelity have been updating their S1-filing in order to adjust to SEC’s requirements and denounce ETH staking. However, Fox reporter Eleanor Terrett revealed that CoinShares and Valkyrie, issuers of spot BTC ETFs, will not apply for a spot ETH ETF. The primary reason cited is the absence of a staking function. The companies believe that without this feature, the ETF lacks value for investors, particularly in a market already crowded with nine issuers.
🚨SCOOP: $BTC spot ETF issuer @CoinSharesCo/@ValkyrieFunds will not apply for an $ETH spot ETF mainly because of the no staking aspect. Sources familiar tell me the company doesn’t see value for investors without it, especially in a crowded market alongside 9 others issuers.
— Eleanor Terrett (@EleanorTerrett) May 21, 2024
Most of the Ether ETF issuers are removing the staking feature from their application as having it would conflict with the SEC’s securities laws. If the US SEC moves toward approval, it would likely distinguish between Ethereum (ETH) and staked Ethereum (stETH) or “staking as a service ETH” as securities.
On Tuesday, May 21, Grayscale Investments decided to withdraw its staking proposal from its ETF application. Grayscale first submitted a Form 19b-4 with NYSE Arca in October, seeking to convert the Grayscale Ethereum Trust into a spot Ether ETF.
On the other hand, global investment manager VanEck’s US spot Ethereum exchange-traded fund has been added to the Depository Trust and Clearing Corporation’s (DTCC) list of ETFs on its website. The DTCC, according to Nasdaq, provides post-trade clearance, settlement, custody, and information services.
After several weeks of silence and lack of communication with the issuers, the US Securities and Exchange Commission (SEC) has suddenly become active this week requesting issuers with their 19b-4 filings. Top players like Standard Chartered believe that the SEC could approve the ETF this week itself.
Speaking on the matter, one of these sources stated that the recent SEC move is largely political rather than regulatory. Issuers responsible for S-1 filings began contacting the SEC. However, a source familiar with the situation noted that examiners in the SEC’s Division of Corporation Finance appeared to be out of sync with the agency’s Division of Trading and Markets.
“It is a completely unprecedented situation, which means it’s entirely political. They’re not even internally coordinated yet, which is why this is most likely a political decision,” the source stated.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
