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 Lookonchain, a blockchain data platform.
This transfer happened just one day after Grayscale unveiled staking for its Ether ETPs, positioning itself as the first US-based crypto fund issuer to provide staking-based passive income for its funds.
This development allows Grayscale’s ETP and its investors to start earning passive income from staking rewards on the $150 million. As per Grayscale’s ETP Staking Policy, those staking rewards will be recognized as “assets of the fund.”
After deducting fees for the sponsor and custodian, the fund’s shareholders can expect to earn up to 77% of the total staking rewards generated by Grayscale’s Ethereum Trust and approximately 94% with the Ethereum Mini Trust, based on the fee structures outlined in SEC filings.
Both Grayscale’s Ethereum Trust ETF (ETHE) and Grayscale’s Ethereum Mini Trust ETF (ETH) are exchange-traded products that are registered under the Securities Act of 1933, not under the Investment Company Act of 1940, which is the regulatory framework used for traditional mutual funds.
This distinctively positions ETPs as structurally different from ETFs that adhere to the 1940 Act.
At least two more funds enabling Ether staking are anticipated to receive feedback from the US Securities and Exchange Commission (SEC) in October.
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October appears promising for crypto, with 16 crypto ETP applications on the SEC’s agenda for the month.
Among these, at least two crypto staking funds are awaiting decisions this month, including the 21Shares’ Core Ethereum ETF (TETH), with its staking filing set for Oct. 23, and BlackRock’s iShares Ethereum Trust (ETHA), which has an amendment seeking to include staking rewards expected on Oct. 30.
The Ether fund from 21Shares is registered under the Securities Act of 1933, making it an ETP, similar to Grayscale’s ETH and ETHE ETPs.
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Meanwhile, the REX-Osprey Solana Staking ETF was launched in July as the first Solana (SOL) staking ETF under the Investment Company Act of 1940, which allows crypto ETFs to hold a majority of their spot assets directly and distribute staking rewards where relevant.
Grayscale’s Solana fund, the Grayscale Solana Trust (GSOL), has also initiated staking and is currently awaiting regulatory approval for uplisting to an ETP.
However, the ongoing government shutdown may delay the regulatory response to crypto ETP applications, as the SEC has noted it will operate “under modified conditions” with a “significantly limited number of staff” until a funding bill is passed.
With no clear resolution anticipated soon, the Senate is set to reconvene later on Tuesday regarding the funding bill, after repeated disagreements between Republicans and Democrats.
The government shutdown has also fueled increased investor interest in cryptocurrency funds and decentralized assets due to rising uncertainty.
Last week, crypto ETPs recorded their highest-ever inflows post-government shutdown, amassing $5.95 billion in cumulative investments, Cointelegraph reported on Monday.
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