Ark Invest, 21Shares drop staking from spot Ethereum ETF proposal Ark Invest, 21Shares drop staking from spot Ethereum ETF proposal
The companies have apparently removed plans to stake ETH.
1 min read
Updated: May. 11, 2024 at 1:09 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Ark Invest and 21 Shares dropped staking plans in their updated spot Ethereum ETF proposal on May 10.
The firms’ previous Feb. 7 filing added a clause detailing that the sponsor — 21 Shares — intended to stake a portion of the fund’s assets through third-party providers.
21 Shares expected to receive ETH as a staking reward and planned to treat earnings as income generated from the fund. The filing acknowledged risks that could result from staking, including losses from slashing penalties and inaccessible funds during bonding and unbonding.
The latest filing removes the relevant section. It maintains broader comments, including potential losses to other validators resulting from staking and the impact of staking on the price of ETH.
Bloomberg ETF analyst Erich Balchunas suggested that the change could be an attempt to get application documents “in shape based on SEC comments” but noted that there have been no comments on the application. He suggested the change may serve as a “Hail Mary” or simply provide the SEC with less information to base a rejection upon.
SEC decision looms
The SEC is expected to approve or reject various spot Ethereum proposals within the next two weeks.
The regulator must decide on VanEck’s spot Ethereum application from May 23, followed by Ark and 21Shares’s application on May 24. However, the agency is expected to decide on all similar, competing applications simultaneously.
Expectations around approval are low. Polymarket odds suggest a 10% chance that spot Ethereum ETFs will gain approval by the end of the month, slightly up from 7% the previous week.
Some competing applications include similar proposals around ETH staking. Franklin Templeton and Fidelity added the possibility of staking in their February filings, while Grayscale added the possibility in a March filing.
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Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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In this article
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Ark Invest
ARK Investment Management LLC (ARK Invest) holds a precision lens on thematic investing.
21shares
21Shares is a Swiss provider of crypto- currency exchange-traded products (ETPs).
VanEck
VanEck is a global investment manager with offices around the world, including New York, Australia, China, Germany, Netherlands and Switzerland.