Senators Advocate for Staking in Crypto ETFs
A bipartisan coalition of U.S. senators has proposed the inclusion of staking within the framework of crypto exchange-traded funds (ETFs), as outlined in a letter to the Securities and Exchange Commission (SEC) on Thursday. This initiative comes in response to the SEC’s previous hesitance to allow staking features in ETF offerings.
Originally, several crypto ETF issuers intended to incorporate staking functionalities into their products. However, the SEC, under the leadership of Chair Gary Gensler until the recent change in administration, had expressed concerns about this practice. The agency had previously taken enforcement actions against platforms like Kraken, asserting that staking constituted an unregistered securities offering.
The letter, prominently supported by Cynthia Lummis, the Republican chair of a Senate subcommittee dedicated to digital assets, urges the SEC to reevaluate this stance. Staking, which involves locking up digital tokens to facilitate blockchain operations in exchange for rewards, is viewed by proponents as essential for the security and integrity of blockchain ecosystems, particularly Ethereum.
In the correspondence, the senators emphasized, “We encourage the SEC to consider the potential benefit to investors from allowing protocol staking in certain digital asset exchange-traded products.” This appeal was co-signed by a number of Republican senators, along with two prominent Democrats: Kirsten Gillibrand of New York, a consistent ally in crypto-related matters, and Ron Wyden of Oregon.
