Nasdaq applies to include staking in BlackRock’s Ethereum ETF as SEC weighs broader industry requests

Nasdaq filed with the Securities and Exchange Commission (SEC) on July 16 to add staking to BlackRock’s iShares Ethereum Trust (ETHA) exchange-traded fund (ETF). 

The rule change would add a detailed “staking” section permitting BlackRock to stake Ethereum (ETH) directly or through one or more trusted staking providers. 

BlackRock would treat received rewards as income, and the firm must hold the staked coins in arrangements consistent with a May statement by the SEC Division of Corporation Finance on certain protocol staking activities. 

Notably, the asset manager must also obtain either a counsel opinion or US government guidance on federal tax treatment before it starts.

Furthermore, in the event of slashing or forking, BlackRock will not subsidize or absorb incoming losses. 

Nasdaq stated that its proposal would enable ETHA to capture returns while operating under defined constraints intended to protect shareholders and the market.

Competitive queue and deadlines

BlackRock joins a queue of issuers that have asked regulators to let their US-based spot Ethereum products earn protocol rewards. 

Cboe seeks authority for Fidelity’s FETH, Franklin Templeton’s EZET, Invesco Galaxy’s QETH, and 21shares’ CETH.

On NYSE Arca, Bitwise seeks approval to stake the ETH held in its ETHW. At the same time, Grayscale seeks the same approval for its ETHE and mini trust.

Bloomberg ETF analyst James Seyffart reacted to the Nasdaq submission on X, saying it was “about time.” 

The first final deadline for prior filings is in October, while the deadline for Nasdaq’s filing on BlackRock’s ETF is in early April. However, Seyffart believes it is unlikely for the SEC approval to take that long. 

Flows support issuer push

US-listed spot Ethereum ETFs attracted more than $726 million in net inflows across nine funds on July 16, marking a daily record.

ETHA led allocations with $499.2 million, marking a record for daily inflows into the fund, representing nearly 69% of the total.

The heavy inflows may indicate that institutional investors are betting on Ethereum’s fundamentals, such as its infrastructure for stablecoins and tokenized assets.