Grayscale Seeks SEC Approval for Ethereum ETF Trust, Citing $61M Revenue Loss

Grayscale, a prominent digital currency asset manager, has urged the U.S. Securities and Exchange Commission (SEC) to approve its Ethereum ETF Trust. The company highlighted that the inability to participate in staking activities has resulted in a significant loss of revenue, amounting to approximately $61 million from inception until February 2025. Grayscale's total assets under management for the U.S. Ethereum ETP have reached $8.1 billion, underscoring the substantial interest and investment in Ethereum-based products.

During a meeting with the SEC's crypto working group in Washington D.C. on April 21st, Grayscale proposed amending the 19b-4 application for the Grayscale Ethereum Trust ETF (ETHE) and the Grayscale Ethereum Mini Trust ETF. The proposed changes aim to allow for staking activities, which Grayscale argues would enhance the security of the Ethereum network while providing additional returns to shareholders. Staking involves holding and locking up a certain amount of cryptocurrency to support the operations of a blockchain network, in return for rewards.

Ask Aime: "SEC Urged to Approve Grayscale's Ethereum ETF Trust Amid Staking Revenue Loss"

Grayscale's push for approval comes at a time when the regulatory landscape for cryptocurrencies is evolving. The SEC has been cautious in approving cryptocurrency-related ETFs, citing concerns over market manipulation and investor protection. However, Grayscale's argument that staking could benefit both the network and investors may sway the SEC's stance. The approval of the Ethereum ETF Trust would not only provide investors with a new avenue to gain exposure to Ethereum but also set a precedent for other cryptocurrency ETFs seeking regulatory approval.

The potential approval of the Ethereum ETF Trust by the SEC could have broader implications for the cryptocurrency market. It would signal a shift in regulatory attitudes towards digital assets, potentially paving the way for more innovative financial products. Additionally, the inclusion of staking activities in the ETF could attract a wider range of investors, including those seeking passive income through cryptocurrency holdings. However, the SEC's decision will ultimately depend on its assessment of the risks and benefits associated with the proposed changes.