The U.S. Securities and Exchange Commission (SEC) has extended its review period for a proposed rule change that would allow Grayscale to stake Ethereum (ETH) held in its two spot ETFs.
The agency’s new deadline is June 1, giving regulators more time to assess the implications of allowing staking within a publicly traded investment vehicle.
ETH Staking Bid
NYSE Arca filed the request in February, proposing that the Grayscale Ethereum Trust and Grayscale Ethereum Mini Trust be permitted to participate in ETH’s proof-of-stake (PoS) system while maintaining standard custodial protections through Coinbase Custody.
Staking would introduce an income-generating layer to ETH ETFs, offering investors passive yield in addition to price exposure, a model already permitted in other jurisdictions like Canada and Hong Kong. However, the SEC has yet to approve such a feature in the U.S., maintaining a cautious stance even as institutional interest grows.
Many institutions, including BlackRock, have pushed for the approval of ETH’s staking system, calling it an “untapped” potential.
A Conservative Commission in Transition
The decision to delay comes amid significant changes at the SEC. With President Donald Trump back in office and pro-crypto figures like Paul Atkins now installed in key regulatory roles, expectations for a more favorable crypto environment are rising. The Commission recently approved options trading for spot Ethereum ETFs—another sign of potential thawing.
Still, experts say staking inside ETFs presents unique risks. Unlike direct ETH staking by individual users, allowing pooled staking through a financial product involves new layers of delegation, reward distribution, and regulatory oversight. The SEC’s delay may reflect a desire to tread carefully before opening the floodgates.
ETH’s market performance hasn’t offered much support either. ETH is down roughly 16% over the past month and remains stuck below the $2,000 mark, currently trading near $1,620, as per data from CoinGecko.
ETF inflows have been decent, totaling $2.28 billion since last year’s launch. But that number pales in comparison to Bitcoin ETF flows, which have topped $35 billion, according to data from Farside.
Staking could be a much-needed catalyst to reinvigorate institutional appetite for ETH-based products
