BlackRock’s Staking Proposal Tests SEC’s Crypto ETF Boundaries

The SEC’s decision to review staking for BlackRock’s Ethereum ETF could signal a pivotal shift in crypto investment products.

By soliciting public input on the iShares Ethereum Trust, the agency is weighing whether to expand ETF capabilities beyond its earlier cash-only models. Competitors like 21Shares and Grayscale have parallel proposals pending, while Rex Shares’ July 2 launch of a staked ETF demonstrated alternative pathways.

May’s SEC staff guidance—that some staking doesn’t qualify as securities—lent credibility to the concept. Yet the agency’s past approvals of spot Bitcoin and Ethereum ETFs deliberately omitted staking, despite their $10B+ inflows. A reversal now could accelerate institutional crypto adoption, but regulatory hesitancy remains a wildcard.