The U.S Securities and Exchange Commission (SEC) has delayed its decision on a proposal to allow staking for the Grayscale Ethereum Trust ETF and Grayscale Ethereum Mini Trust ETF. NYSE Arca Inc submitted this proposal to the SEC on February 14 2025.

Based on the extension by the SEC, the review term which began on February 14, 2025 will end in June 2025. The extension period will allow officials from the commission to study the proposed rule modification and its implications. 

Grayscale’s Proposal to Enable Staking on its ETH ETFs

Eleanor Terrett, a top ex-Fox Business correspondent, shared on X that the SEC has decided to delay its decision regarding the proposal to add staking capabilities to Grayscales’ ETH spot ETF. In an official press release by the U.S SEC dated April. 14, 2025, the commission confirmed the extension of the deadline for the review of the proposal. 

“Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act, designates June 1, 2025, as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change (File No. SR-NYSEArca-2025-13),” SEC’s official announcement read. 

Under the new Grayscale proposal, both the Grayscale Ethereum Trust ETF and the Grayscale Ethereum Mini Trust ETF will be able to stake specific amounts of Ether holdings. The two ETFs are currently traded on NYSE Arca, a digital assets’ exchange.

Approval of this proposed change would enable the funds to be used in the Ethereum proof-of-stake consensus mechanism. Through participating in the staking process, ETH holders can obtain rewards by validating blockchain transactions for Ethereum’s network. The Ethereum.org website reveals that network support combined with passive revenue production define staking as a means to secure the network.

Additionally, the proposed change is considered an important step. The inclusion of yield-generating elements might improve the ETH spot ETF attractiveness as it will provide investors with additional income. Based on the existing regulatory uncertainty, the Spot Ether exchange-traded funds do not allow staking. 

SEC Cites Need for Additional Time to Assess Impact

As announced, the SEC requires additional time to assess the issues raised by the proposed rule change. The Commission must decide whether the inclusion of staking changes the risk profile of the ETFs. It also needs to determine if staking aligns with investor protection standards and market integrity rules.

“The Commission finds it appropriate to designate a longer period within which to take action,” reads the SEC filing. “This allows sufficient time to consider the proposed rule change and the issues raised therein.”

So far, no public comments have been submitted regarding this proposal. This absence of commentary may limit broader market feedback during the review.

Grayscale’s Role and Market Implications

Grayscale is one of the largest crypto asset managers in the U.S. It currently manages billions in cryptocurrency-based trusts. The company has been at the forefront of seeking ETF approvals in the country, including its successful effort to convert its Bitcoin Trust into a spot ETF.

Enabling staking on Ethereum spot ETF could give Grayscale an edge over other ETF providers. Furthermore,  Grayscale’s proposal may serve as a baseline for staking-based crypto investment products. But, this is dependent on whether the SEC will approve the staking of Ethereum spot ETF. 

SEC approval of this proposal might trigger other Ethereum funds to introduce staking services to their customers. The potential expansion of Ethereum ETF range together could have a positive impact on Ethereum’s market performance.