A First for the U.S.: Staking-Enabled Crypto ETP

According to blockchain data, Grayscale staked 32,000 ETH, valued at roughly $150 million. This transaction occurred only a day after the firm rolled out staking features within its Ethereum ETPs.

With this launch, Grayscale became the first U.S.-based crypto fund issuer to offer passive income opportunities via staking. As outlined in the company’s ETP Staking Policy, the rewards generated will be treated as assets of the fund itself.

Shareholders will receive the majority of staking proceeds after sponsor and custodian fees are deducted:

• Ethereum Trust (ETHE) investors will collect about 77% of net rewards.

• Ethereum Mini Trust (ETH) investors will earn roughly 94% of rewards.

ETP vs. ETF: What’s the Difference?

Both the Grayscale Ethereum Trust (ETHE) and Ethereum Mini Trust (ETH) are structured as ETPs under the Securities Act of 1933. This sets them apart from traditional ETFs, which fall under the Investment Company Act of 1940.

This regulatory distinction means ETPs operate differently in terms of structure, governance, and investment flexibility compared to ETFs overseen by the 1940 framework.

A Busy October Ahead for the SEC

While Grayscale’s move establishes the first staking ETP in the U.S., October could be pivotal for crypto investment products. The U.S. Securities and Exchange Commission (SEC) faces decisions on 16 pending crypto ETP filings this month.

Two of these proposals specifically involve staking:

• 21Shares Core Ethereum ETF (TETH) is set for review on October 23.

• BlackRock’s iShares Ethereum Trust (ETHA) amendment, seeking to add staking rewards, is expected on October 30.

Solana Staking ETFs and Other Developments

Earlier this year, the REX-Osprey Solana Staking ETF launched under the 1940 Act, becoming the first Solana staking fund with regulatory approval. This structure allows funds to hold spot assets directly and distribute staking rewards to investors.

Meanwhile, Grayscale’s Solana Trust (GSOL) has already enabled staking and is awaiting approval to uplist as an ETP.

Government Shutdown Clouds the Outlook

The ongoing U.S. government shutdown may slow regulatory progress. The SEC has announced it will be operating with “extremely limited staff,” which could delay responses to pending crypto ETP applications.

Yet uncertainty appears to be boosting investor appetite. Last week, crypto ETPs recorded all-time-high inflows of $5.95 billion, highlighting growing demand for decentralized assets amid market volatility and regulatory delays.

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The post Grayscale Stakes Large Ethereum! Will the SEC Approve Altcoin ETPs? appeared first on Coin Engineer.

In a letter to SEC Chair Gary Gensler dated March 11, the senators expressed concerns about the insufficient trading volumes and market integrity in cryptocurrencies like Ethereum, which they fear could expose retail investors to fraud and manipulation risks.

Their letter follows the recent launch of ten spot Bitcoin ETFs in the U.S. in January, which led to a resurgence in the cryptocurrency market, with Bitcoin reaching highs of US$73,737.

This move comes as the SEC continues to deliberate on spot Ethereum ETFs. Bloomberg analysts have lowered the likelihood of a spot Ethereum ETF approval to 35%, and the SEC has postponed its decision on several proposed Ethereum ETFs. An announcement is expected in May.

While institutional interest in Bitcoin is increasing, challenges within the crypto industry, such as security and compliance issues, could potentially hinder institutional adoption.

The post US Senators Want SEC to Pump the Brakes on Crypto ETFs appeared first on Coin Engineer.