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SEC Pivots Attention to Crypto Staking Amid Growing Popularity
The US Securities and Exchange Commission (SEC) has shifted its focus towards crypto staking, signaling the potential for new regulatory guidelines. According to FOX Business journalist Eleanor Terrett, the agency is “very, very interested” in exploring this area further.
As reported by Terrett, the SEC has been engaging with industry stakeholders through webinars and other means, seeking transparency on crypto staking activities. This move suggests that the commission may issue new guidance on the practice, which has gained immense popularity recently.
Last week, the SEC’s Crypto Task Force met with representatives from Jito Labs and Multicoin Capital Management to discuss incorporating staking features into crypto exchange-traded products (ETPs). The meeting resulted in the presentation of two proposed models for implementing staking within ETPs. These models include a Services Model, which would enable ETPs to stake native assets through validator service providers while maintaining timely redemptions, and an LST Model that would involve ETPs holding liquid staking tokens representing staked versions of native assets.
The industry stakeholders emphasized the importance of allowing staking within crypto ETPs, citing concerns over investor harm. They argued that preventing staking in these products “harms investors, by crippling the productivity of the underlying asset and depriving them of potential returns, as well as network security, by precluding a significant portion of an asset’s circulating supply from being staked.”
In related news, CBOE BZX Exchange has recently submitted Form 19b-4 to the SEC, proposing the enabling of staking within the 21Shares Core Ethereum ETF. This development marks the first request for staking in an ETF since the SEC approved spot Ethereum ETFs last year.
The proposal comes on the heels of previous attempts by 21Shares and ARK Invest to launch a staked Ethereum ETF, which they eventually removed from their application due to regulatory concerns. The removal led to ARK Invest’s withdrawal from the initiative, leaving 21Shares to proceed with its proposed ETF.
As the popularity of crypto staking continues to rise, the SEC’s increased interest in this space may signal impending regulatory clarity and potentially new guidance for market participants.
Source: cryptobriefing.com
