Grayscale Pursues Regulatory Green Light for Ethereum Staking in U.S. ETPs
Investment management firm Grayscale Investments is formally engaging with the Securities and Exchange Commission’s specialized Crypto Task Force.
The objective is to obtain regulatory clearance for incorporating Ethereum staking functionalities within its exchange-traded product (ETP) offerings available in the United States.
Quantifying the U.S. Investor Disadvantage
A key component of Grayscale’s argument centers on the financial disadvantage faced by American investors under the current rules.
The firm points out a big difference compared to other countries where staking is allowed, estimating that its U.S. Ethereum ETPs—worth about $8.1 billion—have missed out on around $61 million in earnings from staking rewards by February 2025.
Current Rules Limit Ethereum ETP Capabilities
Grayscale claims that its current ETPs can’t take full advantage of what the Ethereum network can do because of these regulatory restrictions.
This limitation contrasts notably with the situation in Europe and Canada, where analogous investment vehicles have already integrated staking features successfully.
Proposed Solutions for Liquidity and Risk
To preemptively address regulatory apprehensions regarding asset liquidity, especially during the mandatory lock-up periods associated with unstaking, Grayscale has put forward a detailed risk mitigation plan.
This plan includes advanced strategies such as a purpose-built “Liquidity Sleeve” and provisions for various short-term financing facilities, designed to ensure investors retain adequate redemption flexibility.
Advocating Staking Benefits and Operational Safeguards
Craig Salm, Grayscale’s chief legal officer, has conveyed that the ongoing conversations with regulators are constructive.
The firm’s detailed submission emphasizes a dual benefit of enabling staking: it would contribute positively to the operational security of the Ethereum blockchain while simultaneously unlocking an additional source of value for the ETP shareholders.
Drawing upon established practices within conventional financial markets, Grayscale has detailed robust operational controls, featuring a strategic custodial partnership with Coinbase.
While the proposal acknowledges potential difficulties, including navigating tax consequences and managing technical complexities, it also outlines specific mitigation measures derived from standard industry practices.
Call for Regulatory Modernization
This initiative by Grayscale is indicative of a broader trend seeking to align U.S. regulations governing cryptocurrency investment products with the rapidly evolving market landscape.
The company posits that the current regulatory framework has not kept pace, effectively placing American investors in a position where they forego returns that directly benefit their counterparts in jurisdictions with more permissive staking regulations.
