Grayscale, an asset manager focused on cryptocurrency, staked $150 million in Ether after launching staking for its exchange-traded products (ETPs) on Monday.
The company staked 32,000 Ether (ETH) valued at $150 million, according to data from blockchain analytics platform Lookonchain.
This transfer took place a day after Grayscale started staking for its Ether ETPs, making it the first US-based crypto fund issuer to provide staking-based passive income for its offerings.
This initiative allows Grayscale’s ETP and its shareholders to earn passive income from staking rewards on the $150 million. According to Grayscale’s ETP Staking Policy, these rewards will be classified as “assets of the fund.”
After deducting fees for the sponsor and custodian, fund shareholders will retain up to 77% of total staking rewards from Grayscale’s Ethereum Trust and around 94% from the Ethereum Mini Trust, based on fee structures revealed in SEC filings.
Grayscale’s Ethereum Trust ETF (ETHE) and Grayscale Ethereum Mini Trust ETF (ETH) are ETPs registered under the Securities Act of 1933, distinguishing them from traditional mutual funds regulated by the Investment Company Act of 1940.
This regulatory distinction makes ETPs structurally different from ETFs regulated by the 1940 Act.
At least two more Ether staking-enabled funds are expected to receive feedback from the US Securities and Exchange Commission (SEC) in October.
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October is becoming a pivotal month for cryptocurrency, with 16 crypto ETP applications scheduled for consideration by the SEC.
Among these, two crypto staking funds are pending decisions this month, including the 21Shares’ Core Ethereum ETF (TETH), with a staking filing due on Oct. 23, and BlackRock’s iShares Ethereum Trust (ETHA), which expects its amendment for staking rewards on Oct. 30.
21Shares’ Ether fund is affiliated with the Securities Act of 1933, categorizing it as an ETP, similar to Grayscale’s ETH and ETHE ETPs.
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In July, the REX-Osprey Solana Staking ETF made its debut as the first Solana (SOL) staking ETF under the Investment Company Act of 1940, allowing crypto ETFs to directly hold a majority of their spot assets and distribute staking rewards where appropriate.
Grayscale’s Solana fund, the Grayscale Solana Trust (GSOL), has also implemented staking and is currently seeking regulatory approval for its elevation to an ETP.
However, the ongoing government shutdown may delay regulatory responses to crypto ETP applications, as the SEC has indicated it will function “under modified conditions” with a “very limited number of staff” until a spending bill is finalized.
With no clear resolution in view, the Senate plans to reconvene later on Tuesday regarding the funding bill, following multiple failed agreements between Republicans and Democrats.
This shutdown has heightened investor interest in cryptocurrency funds and decentralized assets amid increasing uncertainty.
Last week, Crypto ETPs experienced record inflows following the government shutdown, totaling $5.95 billion in cumulative investments, according to Cointelegraph.
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