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ethereum

Cboe BZX Exchange Pushes For Ethereum ETF Staking In New SEC Filing – Details

Ash Tiwari
by Ash Tiwari
7 months ago
·
Posted in Ethereum
Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

According to a February 12 filing with the US Securities and Exchange Commission (SEC), the Cboe BZX Exchange has submitted a request seeking approval for staking within the 21Shares Ethereum (ETH) exchange-traded fund (ETF).

Cboe Seeks Ethereum ETF Staking Approval

The Cboe BZX Exchange has filed with the SEC to allow ETH held in the 21Shares Core Ethereum ETF to be staked. If approved, the ETF will be able to stake its ETH holdings, enabling investors to earn staking rewards on their Ethereum holdings.

Related Reading: Could Ethereum Finally Be Gearing Up For A Breakout? Here’s What Analysts Predict

For the uninitiated, staking is one of the cornerstones of the Ethereum protocol. The blockchain transitioned from a Proof-of-Work (PoW) consensus mechanism to a Proof-of-Stake (PoS) system in September 2022. Under the PoS model, network participants can stake their ETH to validate transactions and earn rewards in return.

While the SEC approved its first Ethereum ETF in 2024, it explicitly prohibited staking at the time, citing potential violations of federal securities laws. This restriction led major cryptocurrency exchanges such as Coinbase and Kraken to discontinue their staking services for US customers.

However, the SEC’s stance may be shifting following Donald Trump’s victory in the 2024 US presidential election. The agency now has new leadership, reportedly consisting of more pro-crypto officials. 

This is in stark contrast to the previous administration under former SEC Chair Gary Gensler. The new leadership change likely encouraged the Cboe BZX Exchange to submit its request for Ethereum ETF staking services.

In its application, the Cboe BZX Exchange has proposed using a “point-and-click” staking mechanism. This staking method differs from the more traditional ones in that it does not require ETH to be moved to third parties for staking. Rather, it enables the ETF to stake its ETH holdings directly from its custody wallet.

staking
Source: cboe.com

While the point-and-click staking mechanism reduces the likelihood of any security compromise or breach, it does not completely remove potential slashing penalties. To elaborate, slashing penalties are imposed on validators who violate network rules, leading to partial or complete forfeiture of their staked ETH.

To strengthen its case, the Cboe BZX Exchange argued that prohibiting staking for the 21Shares Ethereum ETF is akin to preventing an equity ETF from distributing dividends to its investors. The firm contends that staking rewards should be treated similarly to dividends, as they represent an additional yield generated from holding the asset.

ETH Price Reacts To Staking News

Following the Cboe BZX Exchange’s filing with the SEC, ETH experienced a sharp price increase. The second-largest cryptocurrency by market capitalization surged from $2,547 to a high of $2,795 before stabilizing.

Related Reading: Crypto Whale Offloads 10,070 Ethereum – Is ETH Losing Its Appeal?

Similarly, ETH staking-related tokens, such as Lido (LDO), experienced a notable price rally. LDO surged from $1.46 to a peak of $1.84 before retracing to its current price of $1.66 at the time of writing. At press time, ETH trades at $2,633, up 2.3% in the past 24 hours.

ethereum
ETH trades at $2,633 on the daily chart | Source: ETHUSDT on TradingView.com
Featured Image from Unsplash.com, Charts from Cboe and TradingView.com
Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
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Ash Tiwari

Ash Tiwari

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Ash is a seasoned freelance editor and writer with extensive experience in the blockchain and cryptocurrency industry. Over the course of his career, he has contributed to major publications, playing a key role in shaping informative, timely content related to decentralized finance (DeFi), cryptocurrency trends, and blockchain innovation. His ability to break down complex topics has allowed both seasoned professionals and newcomers to the industry to benefit from his work. Beyond these specific roles, Ash's writing expertise spans a wide array of content, including news updates, long-form analysis, and thought leadership pieces. He has helped multiple platforms maintain high editorial standards, ensuring that articles not only inform but also engage readers through clarity and in-depth research. His work reflects a deep understanding of the rapidly evolving blockchain ecosystem, making him a valuable contributor in a field where staying current is essential. In addition to his writing work, Ash has developed a strong skill set in managing content teams. He has led diverse groups of writers and researchers, overseeing the editorial process from topic selection, approval, editing, to final publication. His leadership ensured that content production was timely, accurate, and aligned with the strategic goals of the platforms he worked with. This has not only strengthened his expertise in content strategy but also honed his project management and team coordination skills. Ash's ability to combine technical expertise with editorial oversight is further bolstered by his knowledge of blockchain analysis tools such as Etherscan, Dune Analytics, and Santiment. These tools have provided him with the data necessary to create well-researched, insightful articles that offer deeper market perspectives. Whether it’s tracking the movement of digital assets or analyzing blockchain transactions, his analytical approach adds value to the content he produces, ensuring readers receive accurate and actionable information. In the realm of content creation, Ash is not limited to just cryptocurrency markets. He has demonstrated versatility in covering other emerging technologies, market trends, and digital transformation across various industries. His in-depth research, coupled with a sharp editorial eye, has made him a sought-after professional in the freelance writing community. From developing editorial calendars to managing content delivery schedules, he has honed a meticulous approach to project management that ensures timely, high-quality work delivery. Throughout his freelance career, Ash has consistently focused on improving audience engagement through well-researched, insightful, and relevant content. His ability to adapt to the evolving needs of clients, whether it's enhancing the visibility of digital platforms or producing thought-provoking pieces for a wide range of audiences, sets him apart as a dynamic force in the field of digital content creation. His contributions have helped to shape a well-rounded portfolio that showcases his versatility, technical expertise, and dedication to elevating the standards of journalism in blockchain and related sectors.

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