The New York Stock Exchange (NYSE) officially filed for the US SEC to approve staking on the Ethereum ETFs by Grayscale Investments.
The prominent market operator, NYSE, confirmed the 19b-4 filing on Friday, Feb 14, seeking the US Securities and Exchange Commission (SEC) approved rule change.
The amendment targets include staking services on the pre-approved Grayscale Ethereum exchange-traded funds (ETFs).
Staking allows holders to lock up their digital assets in exchange for becoming validators within the network.
Staking facilitates contribution towards stabilizing and securing the network, earning passive rewards.
Introducing Staking in Grayscale ETFs
The approval of the rule amendment would offer additional rewards for the Grayscale Ethereum Mini Trust and Trust investors.
The participants in the staking will earn a reward in 3% – 4% APY.
The filing assures the initiative will comply with the existing securities law.
The NYSE clarifies that the staking model will differ from the delegated and typical staking-as-a-service that the SEC profiles as security.
During Gary Gensler’s tenure as chair, the securities watchdog classified staking as unregistered securities.
The regulatory agency approved the spot ETH ETF last year, prohibiting issuers from undertaking staking, citing the federal securities law.
Bloomberg’s senior ETF analyst James Seyffart considers the regulator will likely decide on the proposal by Q4 this year.
Game Changer to Regulatory Block?
The NYSE Arca joins other filings to integrate staking options for the ETH spot ETF holders.
It echoes the move by the Cboe BZX Exchange for the 21Shares Core Ethereum ETF by Ark Investment.
The agenda on staking featured in the recent meeting involving Commissioner Hester Pierce and representatives from Multicoin Capital and Jito Labs.
The review aligns with pursuing a friendlier crypto environment, which coincides with repealing the staff accounting bulleting (SAB) 121 and a 60-day pause to the lawsuit with crypto exchange Binance.