SEC Hits Pause on Ethereum ETF Staking Plan from Bitwise

Bitwises ambitions to integrate Ethereum staking into its ETF have hit a pause as the U.S. Securities and Exchange Commission (SEC) announced it would delay its decision and launch a fresh review process.

The proposal, which would allow Bitwise to stake Ethereum held in its spot ETF, is under increased scrutiny from regulators. While staking offers the potential to earn additional returns by locking ETH to secure the blockchain, the SEC has raised concerns over possible investor risks and conflicts of interest.

In a statement released on June 30, the SEC said it would reopen the matter for public input, signaling hesitation toward approving staking in exchange-traded funds. The regulator is focused on whether such a feature could lead to market manipulation or inadequate investor protections.

Bitwise maintains that staking wouldnt alter the structure or transparency of the ETF and argues it could boost returns for both institutional and retail investors. Still, the SEC insists any updates must align with its mandate to ensure fair and orderly markets.

The public has a limited window to submit feedback before the SEC issues a final decision. For now, the Bitwise Ethereum ETF will continue to operate without staking features.

This review comes as staking becomes a bigger talking point in the ETF space. Rex Shares CEO Gregory King recently revealed that the firms Solana staking ETF is slated to begin trading on July 2, suggesting the broader industry is pushing ahead despite regulatory caution.

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over 8 years of experience covering the crypto, blockchain and fintech industries, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics.