The U.S. SEC reassessed its stance on crypto staking under former chair Gary Gensler, signaling willingly to include the feature in ETFs.
Jito Labs and Multicoin Capital held talks with the Securities and Exchange Commission’s Crypto Task Force regarding potentially including staking in exchange-traded products.
Crypto staking involves depositing digital assets into a smart contract to secure blockchain networks. Stakers receive yield as a reward, incentivizing participation. Developers have also introduced liquid staking and liquid restaking protocols to attract more users.
Under previous administrations and former SEC chair Gary Gensler, staking was effectively restricted and considered a violation of federal regulations. Firms like Kraken were forced to shut down staking services for U.S. customers, though the company has since relaunched the feature amid shifting regulatory policies.
The SEC’s stance appears to have changed following President Donald Trump’s inauguration. A task force established by interim chair Mark Uyeda, led by anti-regulation-by-enforcement commissioner Hester Peirce, has committed to clarifying crypto regulations and addressing industry concerns.
The initiative acknowledged that some issuers originally included staking in Ethereum (ETH) ETF applications but were instructed to remove such language before their filings were considered.
According to the SEC’s Crypto Task Force, the agency is now prepared to reevaluate staking in ETPs. An SEC filing regarding the meeting with Jito Labs and Multicoin Capital even stated that staking could benefit investment products and the broader digital asset ecosystem.
Jito Labs operates Jito, one of the largest Solana-based staking platforms, while Multicoin Capital is a crypto investment firm founded in 2017.
Given the critical role of staking of blockchain networks, we believe staking would be a net benefit
to these ETPs products and the overall crypto industry. Allowing staking of native cryptocurrencies
would enhance the safety and security of the networks in which these assets operate, and would align
investors with the unique features of these assets.SEC filing on meeting with Jito, Multichain
Revisiting staking in ETFs could reignite a debate from 2024, when spot Ether ETFs were still under review. Analysts opined that Ethereum ETFs with staking may concentrate locked Ether supply in the hands of a few. Conversely, experts surmised that the products would drive Ether demand and investor appetite for staking protocols.
