Regulatory Gridlock Stalls Ethereum Staking ETFs in October Limbo

The U.S. Securities and Exchange Commission (SEC) has once again extended its review period for several Ethereum staking-related ETF proposals, further contributing to a backlog of pending crypto fund applications. Among the affected filings are BlackRock’s iShares Ethereum Trust and Franklin Templeton’s Ethereum staking amendment, both of which now face deadlines in late October and early November. The agency has similarly delayed decisions on other crypto ETFs, including those focused on Solana, XRP, Dogecoin, and Hedera. These delays underscore the ongoing challenges faced by asset managers seeking regulatory clarity and approval for digital asset products.

BlackRock’s proposal to permit staking in its iShares Ethereum Trust was initially filed on July 16 and now has a new decision date of October 30. Franklin Templeton’s Ethereum staking amendment, filed with Cboe BZX in mid-March, has been pushed to November 13. The SEC’s updated timeline is based on the maximum allowable extension under Section 19(b) of the Securities Exchange Act, which grants up to 180 days for the evaluation of proposed rule changes. The lack of a clear regulatory stance on the treatment of staking—whether as a yield-generating activity or a custodial risk—continues to complicate the approval process.

The agency’s delays have coincided with a broader shift in tone from the SEC under Chair Paul Atkins. At the OECD Roundtable on Global Financial Markets in Paris, Atkins stated, “Crypto’s time has come,” signaling a willingness to modernize securities regulations to accommodate digital assets. However, this rhetoric has not yet translated into faster approvals. As of August 29, the SEC was reviewing at least 92 crypto-linked ETF applications. Recent examples include the Bitwise Dogecoin ETF and Grayscale Hedera ETF, both of which now face a Nov. 12 decision date.

Industry observers remain cautious about the implications of these delays. While the SEC’s “Project Crypto” initiative aims to establish a unified regulatory framework for digital asset trading, lending, and staking, the continued extensions suggest that the agency is still refining its approach. For institutional investors and fund providers, the uncertainty complicates planning and product development, especially as the crypto market experiences volatility and evolving technological standards.

The regulatory environment remains a key factor influencing the growth of crypto-backed ETFs in the U.S. market. BlackRock and Franklin Templeton have both demonstrated significant inflows into their Ether-based products in recent months, indicating strong investor interest. However, the inability to finalize staking-related proposals is limiting the full potential of these offerings. As the SEC continues its review, stakeholders await a clearer path forward that balances innovation with investor protection and regulatory oversight.

SEC Delays BlackRock, Franklin Templeton Crypto ETF Decisions [https://cointelegraph.com/news/sec-delays-blackrock-franklin-templeton-crypto-etf-decisions]