NYSE Pushes for ETH Staking in Grayscale Ethereum ETFs

The New York Stock Exchange (NYSE) has filed a request with the U.S. Securities and Exchange Commission (SEC) to allow staking services for Grayscale’s Ethereum Exchange-Traded Funds (ETFs).

In a 19b-4 application submitted on Friday, the NYSE proposed a rule change that would permit staking within the pre-approved Grayscale Ethereum Trust and Grayscale Ethereum Mini Trust.

If approved, this positive development would enable Ether (ETH) holders within these ETFs to stake their assets, contributing to network security and earning passive rewards.

Currently, Ethereum staking yields an average annual percentage yield (APY) of 3% to 4%, offering investors an additional source of returns beyond price appreciation.

Regulatory Hurdles and SEC’s Stance on Staking

While the NYSE argues that the proposal does not violate any securities laws, regulatory uncertainties remain. Under SEC Chair Gary Gensler, the agency has maintained that certain staking services could be classified as unregistered securities.

In fact, when approving Ethereum spot ETFs in 2024, the SEC explicitly barred issuers from staking their ETH holdings, citing federal securities laws.

However, the latest filing emphasizes that Grayscale’s staking model differs from delegated staking or staking-as-a-service, which have been targeted by the SEC in previous crackdowns.

The outcome of this request could set a precedent for future ETF staking models.

Growing Interest in Staking for Ethereum ETFs

The NYSE is not alone in this pursuit. The Chicago Board Options Exchange (CBOE) BZX Exchange has also applied for a similar rule change on behalf of Ark Investment’s 21Shares Core Ethereum ETF.

Meanwhile, the SEC’s Crypto Task Force, led by Commissioner Hester Peirce, has engaged with industry players like Jito Labs and Multicoin Capital to explore regulatory frameworks for staking within ETFs.

In a Friday X post, Bloomberg ETF analyst James Seyffart predicts that the SEC will decide on the NYSE’s proposal by Q4 2025.

Given the recent developments, including the SEC’s decision to scrap the controversial SAB 121 rule and pause its legal battle with Binance, there are signs of a potentially more accommodating regulatory environment for cryptocurrencies.

All eyes are now on the upcoming fourth-quarter verdict, which could either allow ETH staking in ETFs or reinforce existing restrictions.