ARK Invest and 21Shares have recently revised their proposal for a spot Ether exchange-traded fund (ETF), notably removing all references to staking activities. The initial filing in February included plans for 21Shares to stake part of the fund’s assets to earn ETH as rewards, categorizing this income as generated by the fund. However, the latest update filed on May 10 omits these details, suggesting a strategic shift in the proposal structure.
Rethinking Strategy: No More Staking
In the earlier proposal, 21Shares indicated a strategy involving the staking of Ether through third-party providers, anticipating earnings classified as income. Yet, the revised document excludes any mention of staking. This decision could be in response to potential feedback or concerns from the U.S. Securities and Exchange Commission (SEC), aiming to simplify the proposal and potentially enhance its acceptance prospects.
Implications of the Change
Removing staking from the proposal might reduce the complexity and perceived risk associated with the ETF, focusing purely on direct exposure to Ether. This move comes at a time when the SEC has been cautious, delaying decisions on several cryptocurrency-based funds, including those from major players like Invesco, Grayscale, and BlackRock.
Also Read: SEC Delays Decision on Galaxy Invesco’s Ethereum ETF Until July
Despite the elimination of the staking component, the proposal still aims to provide direct exposure to Ether and plans to trade on the Cboe BZX Exchange. The underlying Ether assets would be held by Coinbase Custody Trust Company, with ARK Investment Management marketing the shares. The fund’s approval is pending, with the SEC set to decide shortly after reviewing similar applications from other firms.
By streamlining the proposal, ARK Invest and 21Shares might be attempting to align more closely with the SEC’s regulatory framework, enhancing the likelihood of approval. This revision reflects a strategic adjustment to navigate the complex landscape of cryptocurrency ETF approvals.
