SEC Delays Decision on Bitwise’s Amended Ethereum Staking ETF Proposal

The United States Securities and Exchange Commission (SEC) has announced a delay in its decision regarding the inclusion of staking in the Bitwise Ethereum Exchange-Traded Fund (ETF). The regulatory pause follows months of intense discussions among Bitwise, the New York Stock Exchange (NYSE Arca), and various regulatory bodies.

Initially, the Ethereum ETF received approval to hold Ether (ETH) directly. However, Bitwise subsequently proposed an amendment to incorporate staking, a mechanism by which ETH holders can lock up their digital assets to contribute to the security of the Ethereum network. In return for their participation, stakers receive newly minted ETH as rewards.

Bitwise Staking in Ethereum ETF Faces Delay

Staking is considered a viable way to earn extra money. However, regulators worry that adding staking to an Ethereum ETF could bring bigger risks and lead to unfair situations.

Notably, the SEC announced that it would reconsider the Bitwise Ethereum ETF plan. This indicates that the SEC isn’t yet ready to permit staking in the fund. The SEC wants to know if staking in an ETH ETF could harm investors. Bitwise believes staking can help the ETF earn more for investors.

The company says that adding staking won’t change how the ETH ETF holds or reports its assets. Bitwise argues that staking would make the Ethereum ETF more appealing to many investors, including both individual investors and large institutions.

On the other hand, the SEC insists that any changes to the Ethereum ETF must focus on protecting investors and maintaining fair and steady trading. Regulators are concerned that staking might create opportunities for cheating or unfair market dealings.

Due to these concerns, the SEC is seeking public input to inform its final decision on the proposed staking plan for the Ethereum ETF. Many investors want easier ways to invest in Ethereum without having to buy and hold the actual digital currency.

Investment Managers’ Eyes on SEC Decision

Approving spot Bitcoin and Ethereum ETFs last year was a big step for the digital currency market. However, adding staking to an ETH ETF remains a sensitive issue for regulators.

The SEC has set a deadline for submitting comments on this plan. After the comment period ends, the SEC will carefully review all the feedback before making its final decision.

The results of this review could significantly impact how staking is utilized in other similar ETF products. If this plan is approved, other fund managers may also attempt to incorporate staking into their cryptocurrency ETFs.

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