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Ark Invest and 21 Shares Drop Staking Plans in Updated Spot Ethereum ETF Proposal
Ark Invest and 21 Shares have recently made changes to their spot Ethereum ETF proposal. The firms, known for their involvement in the cryptocurrency industry, had initially intended to incorporate staking into the fund’s assets through third-party providers. However, in their updated filing on May 10, this clause has been removed.
The original filing from February 7 outlined 21 Shares’ plan to stake a portion of the fund’s assets, expecting to receive ETH as a staking reward. The earnings generated from the staking activities were to be treated as income for the fund. The document also highlighted potential risks associated with staking, such as losses from slashing penalties and the temporary inaccessibility of funds during bonding and unbonding processes.
The revised filing no longer includes this specific section but retains broader comments regarding the impact of staking on the price of ETH and potential losses that other validators could face. Bloomberg ETF analyst Erich Balchunas speculated that this change may have been prompted by SEC feedback, although no official comments have been received yet. He suggested that the alteration could be a strategic move to streamline the application process or to provide the SEC with less grounds for rejection.
SEC Decision on Spot Ethereum Proposals
The Securities and Exchange Commission (SEC) is set to make decisions on several spot Ethereum ETF proposals in the coming weeks. VanEck’s application is scheduled for review on May 23, followed by Ark and 21Shares’ submission on May 24. While the applications are being considered individually, the SEC is likely to announce its verdict on all similar proposals simultaneously.
Market expectations regarding the approval of spot Ethereum ETFs are modest, with Polymarket odds indicating a mere 10% chance of approval by the end of the month, a slight increase from the previous week’s odds of 7%. Competing applications from Franklin Templeton, Fidelity, and Grayscale have also incorporated staking possibilities in their filings, further enriching the landscape of potential ETF offerings in the market.
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