BlackRock Seeks SEC Nod to Introduce Staking in Ethereum ETF

• BlackRock filed to add staking services to its iShares Ethereum Trust, allowing ETF investors to earn staking rewards.
• The move reflects a broader shift, with Grayscale, Fidelity, and 21Shares also seeking to integrate staking into their Ethereum ETFs.
• Under SEC Chair Paul Atkins, the agency has adopted a more innovation-friendly stance, easing prior restrictions on staking-as-a-service.

The largest Ethereum ETF fund in assets under management, BlackRock’s iShares Ethereum Trust, is planning to introduce staking services to shareholders. 

Today, BlackRock and Nasdaq filed a 19b-4 filing with the SEC, requesting permission to introduce staking services. The move would allow shareholders to receive financial rewards for their holdings. 

The filing also discloses that said staking rewards are to be treated as income, meaning that the rewards distributed to shareholders will be subject to taxation under standard income tax rules.

This move would arguably make Ethereum ETFs more appealing to investors, as the additional yields generated from staking could further boost shareholders’ investments. 

While BlackRock is the most significant fund manager in the ETF landscape, the decision to request adding staking to Ethereum exchange-traded funds has already been made by several other firms, including Fidelity,  21Shares, and Grayscale. 

Back in the previous SEC administration under Gary Gensler, staking rewards became a big talking point as the Commission argued that staking better resembled dividends, which would make them unregistered securities. 

The fact that nearly all Ethereum ETF fund managers are now seeking to add staking reinforces just how much the SEC has changed over the last months. Now, under Paul Atkins, the Commission adopted a laxer stance on digital assets, seemingly favoring coming up with crypto-focused regulations rather than enforcing existing securities laws through litigation.

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