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**SEC Reviews Grayscale Ethereum ETF Staking Proposal with May Decision Expected**
The United States Securities and Exchange Commission (SEC) has taken steps to review a proposal from Grayscale Investments to add staking functionality to its Ethereum ETF, according to recent reports. This move marks a significant development in the regulatory landscape, as it addresses concerns surrounding the integration of staking into regulated investment products.
As part of this process, the SEC will have 45 days to either approve, disapprove, or extend the review period for Grayscale’s proposal. If approved, this decision would likely take place by May 26, 2025, with the possibility of a longer timeline based on regulatory considerations.
Grayscale has been actively exploring the addition of staking functionality to its Ethereum ETF since March 2024, following Fidelity’s initial initiative. However, prior efforts were delayed due to regulatory complexities surrounding whether staking constitutes an investment contract under U.S. securities laws.
Recent reports indicate that the SEC is now actively engaging with industry players to better understand different forms of staking and their benefits, potentially paving the way for a more favorable decision. According to Eleanor Terrett, a journalist who spoke on X (formerly Twitter), “The SEC has shown a very, very interested stance on staking and has been asking experts for further insights.”
This shift in regulatory approach aligns with other recent developments within the industry. In January 2025, the agency accepted a proposal from 21Shares to incorporate staking into its Core Ethereum ETF, suggesting an increased interest in integrating staking into regulated investment products.
Grayscale’s efforts are part of its broader expansion plans for cryptocurrency ETF offerings. The digital asset management firm has been filing numerous crypto ETF applications throughout the year, including proposals for XRP, Cardano (ADA), and Polkadot. As part of this initiative, Grayscale’s proposed XRP exchange-traded fund has already hit the SEC’s Federal Register, opening a 21-day comment period.
The regulator is expected to make a decision on the XRP ETF by October 18, 2025. Additionally, it is reviewing Grayscale’s filing for a spot Cardano (ADA) ETF, which would allow investors to gain exposure to Cardano without directly holding the asset.
Market observers have noted that changes in regulatory aspirations under President Donald Trump’s administration may be creating an environment conducive to the submission of new applications. Companies are betting on a more favorable regulatory backdrop under potential SEC leadership adjustments.
In related news, the SEC has dropped its investigation into Robinhood’s crypto unit and Uniswap exchange, hinting at a possible shift in regulatory approach.
The outcome of Grayscale’s proposal will significantly impact how regulated investment vehicles engage with blockchain networks’ validation processes while maintaining investor protections.
