SEC Delays Bitwise Ethereum ETF Staking Decision
The US Securities and Exchange Commission (SEC) has delayed its decision on Bitwise Asset Management's application to include Ethereum staking in its proposed exchange-traded fund (ETF).
SEC's Fresh Review of Bitwise's Ethereum ETF Proposal
Bitwise initially sought approval for an ETF that would directly hold Ethereum. Subsequently, they proposed adding a staking component, allowing the ETF to generate additional returns by participating in Ethereum's proof-of-stake consensus mechanism. While staking offers potential income for investors, the SEC expressed concerns about the increased risks and potential conflicts of interest involved.
In an official statement released on June 30, 2025, the SEC initiated a comprehensive review of the amended proposal. This indicates their hesitation to approve the inclusion of staking at this time. The commission aims to thoroughly assess whether allowing staking within an ETH ETF could expose investors to undue risk.
Bitwise contends that staking would enhance the ETF's overall returns without altering its asset holding or reporting procedures. They believe this feature would increase the ETF's appeal to both retail and institutional investors.
Public Input Sought on Ethereum ETF Staking
The SEC emphasizes that any changes to the ETF must prioritize investor protection and maintain fair market practices. Concerns persist regarding the potential for fraud and unfair trading practices related to staking within the ETF structure. The SEC is actively seeking public comment to inform its final decision.
Many investors eagerly await more convenient ways to participate in the Ethereum market without directly holding the cryptocurrency. While the approval of spot Bitcoin and Ethereum ETFs marked significant progress, integrating staking into an ETH ETF remains a delicate matter for regulators.
Following the comment period, the SEC will review all submissions before making a final ruling. Until then, Bitwise's ETH ETF will remain a standard spot ETF. The SEC's decision will significantly impact the future of staking in similar ETFs; approval could encourage other fund managers to follow suit.
It is important to note that Rex-Osprey’s CEO, Gregory King, announced that their Solana staking ETF is planned for launch on July 2nd.
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