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The U.S. Securities and Exchange Commission (SEC) has announced a delay in its decision regarding the proposal for a new Ethereum staking ETF from Bitwise. This move comes amid increased regulatory scrutiny, with the SEC citing concerns over potential risks tied to staking rewards.
As previously reported, Bitwise submitted an updated amendment in late March, triggering a formal review process by the SEC. The Commission initially designated May 20 as a decision deadline but has opted to extend the review period further. This extension signals the SEC’s intent to thoroughly examine the proposal before allowing the ETF to proceed.
The proposed ETF aims to include Ethereum staking in its structure, enabling the fund to earn blockchain rewards through proof-of-stake validation. However, the SEC has launched an investigation into potential risks associated with validator slashing and asset lockups. This scrutiny comes as a response to concerns that introducing active participation in blockchain consensus within a passive fund raises significant legal and technical questions.
Staking Risks Raise Structural Questions for ETH ETF
The proposed modification of the Bitwise Ethereum ETF would allow it to earn staking rewards, which could enhance its appeal without changing its core structure. However, the SEC emphasizes that including active participation in blockchain consensus within a passive fund raises important legal and technical questions.
Following this, the exchange filed an updated amendment in late March, triggering a formal review process by the SEC.
Source: coincentral.com
