Bitwise argues that staking could enhance investor returns. The company clarified that it has not altered the ETF structure, emphasizing that the proposal only aims to increase the potential for passive income. However, the SEC raised concerns that staking might elevate potential risks for investors and could lead to conflicts of interest. 

Previously, Ethereum ETFs were approved solely for holding spot ETH. Bitwise now seeks to incorporate staking within the ETF to earn additional rewards by locking up ETH in the Ethereum network. This system, known as staking, involves earning new coin rewards in return for securing the blockchain. 

To better understand the impact of this proposal on investors, the SEC is requesting public commentary, with particular focus on the risks associated with staking. Key concerns include investor control over staked assets, potential for fraud, and lack of transparency. 

Notably, the SEC’s decision will not only affect Bitwise’s application but could also set a precedent for other Ethereum ETF providers. If approved, staking support could usher in a new era for crypto ETFs. 

DOGE ETF Decision Also Delayed: SEC Postpones Review of 21Shares Application 

The SEC’s focus is not limited to Ethereum ETFs. The application from 21Shares for a Dogecoin (DOGE)-based ETF also failed to progress to the next stage of evaluation. The commission extended the review period by an additional 60 days for a more detailed assessment. 

21Shares submitted its DOGE ETF application earlier this year, triggering major discussions about the role of highly volatile assets like DOGE in regulated investment products. The SEC has yet to provide a clear stance on how such speculative assets should be treated in ETF form. 

However, this delay does not necessarily mean rejection. The commission is examining whether the application aligns with investor protection, market fairness, and transparency principles. 

A New Era for Crypto ETFs May Be Approaching 

Staking-related proposals are reframing crypto investment products not just as value-holding tools but also as yield-generating instruments. Bitwise claims adding staking features to its Ethereum ETF could appeal to both retail and institutional investors. 

Ultimately, the SEC’s decisions on these proposals will influence not just Bitwise but all fund managers in the space. If staking is approved, it may lead to the development of similar staking-enabled ETF models for Ethereum and other proof-of-stake (PoS) cryptocurrencies. 

Meanwhile, another development in the crypto space: RexShares-Osprey CEO Gregory King announced that the company would launch a Solana staking ETF on July 2. This move signals growing momentum behind staking-enabled ETFs. 

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The ongoing XRP lawsuit between Ripple and the SEC has reached another critical point. U.S. District Judge Analisa Torres of the Southern District of New York rejected the joint motion for a ruling and settlement submitted by both parties. Hopes for a swift resolution have been temporarily delayed. 

Ripple and the SEC had requested the $125 million penalty be reduced to $50 million and certain obligations to be lifted. However, the court found that this motion was not properly filed. 

Court Speaks Clearly: Procedural Errors Determine the Outcome 

Judge Torres referred to Federal Rule of Civil Procedure 60(b). The parties failed to consider this rule in their submissions. This rule only allows exceptions under extraordinary circumstances. Therefore, the court stated it could not review the motion. Additionally, presenting the requests as a settlement did not simplify the process. The court emphasized its duty to consider the public interest. The parties’ expectations were not met. 

Defense attorney James Filan explained on social media that the decision was based on procedure. According to him, the requests were not rejected but were dismissed due to incorrect filing. Meanwhile, legal expert Fred Rispoli warned about the process ahead. He said Ripple and the SEC would refile their motion properly. However, this time, the court must be convincingly persuaded of the public interest. 

XRP Price Drops 

Following the decision, XRP experienced a sharp decline. Losing over 4%, XRP fell to around $2.45. Naturally, this caused anxiety among investors. The prolonged lawsuit has reduced short-term market confidence. Ripple’s Chief Legal Officer, Stuart Alderoty, stated that the ruling does not affect the determination that XRP is not a security. He also emphasized that both parties agreed on the settlement and will revisit the court process. 

Legal analysts MetaLawMan and Bill Morgan also issued warnings. Both believe it has become more difficult for judges to overturn previous rulings. This means the case will become more complicated for Ripple and the SEC. 

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The post Court Rejects Ripple and SEC: Will the XRP Lawsuit Continue?  appeared first on Coin Engineer.