Grayscale Investments, meanwhile, is in the process of pursuing litigation against the U.S. Securities and Exchange Commission (SEC) for making the case to push regulators to move forward. Representing the 2nd largest owner of Ethereum, the firm is lobbying for the inclusion of staking in Ethereum Exchange Traded Funds (ETFs). This rule change is intended to make U.S. investment products more competitive with markets abroad. One adjacent country, Canada, for instance, has already allowed staking. Grayscale has become one of the most powerful actors in the crypto investment landscape. Indeed, it was instrumental in shepherding the first Bitcoin ETFs to approval and is now looking to do the same with Ethereum ETFs.

Losing access to the staking feature of the Ethereum network has caused investors in the U.S. to miss out on major profit opportunities. As of March 2025, these missed rewards total an estimated $61 million. Grayscale’s litigation and advocacy seeks to realize this potential value, modernizing rules to match the current market’s realities.

Grayscale's Push for Regulatory Change

Grayscale had been thoroughly previewing and arguing their case to the SEC’s crypto asset unit. In doing so, they’re advocating for changes that would allow staking within Ethereum ETFs. The firm argues that existing regulations mischaracterize the market. There is little risk of that happening with U.S. Ethereum ETFs, which don’t incorporate staking. Consequently, these products are unable to deliver on the real value and experience Ethereum has to offer.

This regulatory gap harms U.S. investors by disadvantaging them in comparison to investors in other countries. Canada, for instance, has already approved Ethereum ETFs with staking that provide supplementary returns to investors. Now Grayscale wants to bring U.S. investors back on a level playing field, allowing them to enjoy the same benefits as their counterparts.

Grayscale seeks to release hundreds of millions in rewards by staking. This innovative potential has too often been stifled by the existing regulatory framework. This move serves investors overwhelmingly. Moreover, it would increase the attractiveness and competitiveness of U.S. Ethereum ETFs in the global marketplace.

The Impact of Missed Staking Rewards

The exclusion from staking has made a real dollars-and-cents difference for Ethereum ETFs in the U.S. That’s about $61 million loss in potential staking rewards since the launch of these investment products. This figure highlights the substantial opportunity cost of the current regulatory barricade.

Grayscale's Ethereum ETFs in the U.S. have accumulated a substantial amount of assets, contributing to the $6.2 billion total held by such ETFs. At the same time, the firm represents about one-third of these assets, testament to the firm’s market-dominating influence. Grayscale’s ETFs and other U.S.-based funds have no staking. This exclusion has robbed investors of more than $200 billion in potential income.

Add staking to the mix and watch your returns soar. Most importantly, it will better serve to highlight Ethereum’s value proposition. Staking is the heart of the Ethereum network. This allows token holders to play a more active role in the validation process and come out earning rewards based on their contributions.

Potential Benefits and Future Outlook

The SEC's crypto asset group met with Grayscale to discuss the firm's proposals. Today’s meeting is further evidence that the SEC is eager to hear from industry stakeholders. Yet they are still willing to engage in conversations about where regulatory updates could make sense. We appreciate Grayscale’s efforts to bring 21st century regulations to bear, which recognize that the cryptocurrency market is no longer one-dimensional.

Permitting staking in Ethereum ETFs would be an undeniably transformative change to the U.S. Ethereum crypto landscape. This new move will bring the U.S. market in line with international standards. Beyond this, it will lead to more investment overall and provide investors with access to Ethereum’s full potential. The expected approval of Bitcoin ETFs thus far highlights the opportunities for regulatory breakthroughs in the crypto-sphere. Grayscale deserves a ton of credit for making this happen.

The outcome of Grayscale's efforts remains uncertain, but the firm's advocacy highlights the growing importance of staking in the Ethereum ecosystem. A favorable decision from the SEC could pave the way for significant growth and innovation in the U.S. Ethereum ETF market.