The US regulatory body for securities, the SEC, formally acknowledged a recent proposition from Nasdaq on July 29. This proposal suggests modifying BlackRock’s iShares Ethereum Trust (ETHA) to potentially allow the fund to stake its holdings of ETH.
The filing submitted by Nasdaq entails removing a previous stipulation. This original clause restricted BlackRock and its custodial service from utilizing any ETH within the exchange-traded fund (ETF) for validating the Ethereum proof-of-stake blockchain or generating revenue.
The updated proposal introduces a dedicated “staking” section. This section grants permission to stake some or all of ETHA’s Ethereum, either directly or through reputable staking service providers. Any rewards earned from staking would accrue to the ETF and could be considered as income.
Swift Acknowledgment
Nasdaq submitted its initial request on July 16 to incorporate staking into BlackRock’s ETHA. The filing included a detailed section outlining the possibility of staking directly or through trusted vendors, treating resulting rewards as income, and operating in accordance with Corp Fin guidelines while securing clarification on tax implications before launch.
James Seyffart, an analyst at Bloomberg, commented that the Nasdaq application was “about time,” highlighting that the initial deadline for prior submissions is in October, while Nasdaq’s BlackRock filing faces a deadline in early April 2026. However, Seyffart anticipates a resolution sooner.
Several other entities are also competing for authorization, including Cboe, which has requested permission for Fidelity’s FETH, Franklin Templeton’s EZET, Invesco Galaxy’s QETH, and 21Shares’ CETH.
Concurrently, NYSE Arca is seeking similar authorization for Bitwise’s ETHW, and Grayscale Investments’ ETHE as well as its mini trust.
The push to permit staking within spot ETFs gained momentum following a statement from the SEC’s Division of Corporation Finance, issued on May 29. The statement clarified that engaging in standard protocol staking activities does not necessitate registering those activities as securities transactions.
The regulator’s communication encompassed self-staking, delegated staking, custodial staking, and non-custodial staking. Furthermore, features such as early withdrawals, slashing safeguards, or asset aggregation do not automatically classify staking as a securities offering under existing federal law.
Justification and Assessment Schedule
Nasdaq contends that enabling ETHA to participate in staking would better correlate the fund’s performance with the returns associated with holding Ether, streamline the creation and redemption processes, and ultimately benefit investors.
The filing also details the importance of staking in supporting the validation mechanism of the Ethereum network and how validators are compensated through block rewards.
Following its publication in the Federal Register, the SEC has a window of 45 days, which may be extended to 90 days, to either approve, reject, or initiate further proceedings concerning the proposed amendment.
The SEC has also opened the matter for public commentary.