The Chicago Board Options Exchange (CBOE) is seeking approval for Ethereum (ETH) staking in the ARK 21Shares Core Ethereum ETF (CETH).
The CBOE filed a Form 19b-4, requesting approval from the United States Securities and Exchange Commission (SEC) to implement staking in the 21Shares Core Ethereum ETF. If approved, the application would result in the first United States Ethereum spot exchange-traded fund (ETF) product that includes staking.
The details
Staking in Ethereum involves locking up Ethereum to help secure the network and validate transactions in exchange for earning additional Ethereum. Implementing it in the ETF would result in its holders earning an additional return on their investment.
The form filed by the CBOE requests a rule change in the structure of the already listed investment product. The proposed rule would see the staking rewards be treated as income for the fund and be distributed among contract holders — allowing for passive income not unlike dividends in traditional ETFs.
The filing’s authors claim that not staking is equivalent to waiving the right to earn additional Ethereum. If the trust is allowed to stake its ETH, the fund would better represent the returns earned by large-scale Ethereum holding.
The news follows Consensys founder Joe Lubin’s recent prediction that regulators will soon allow Ethereum ETFs to engage in staking. Consensys is among the key players in the Ethereum ecosystem, founded by Ethereum co-founder Joseph Lubin.
During a recent interview, Lubin said that Consensys has “been in discussions with the ETF providers, and they’re already working hard on [staking implementation], so they expect that to be greenlit reasonably soon.” He further added that ETF issuers are “working hard on creating the best solutions” to address “any complexities around staking and slashing.”
At the time of writing, Ethereum is trading just under $2,630 after seeing its price fall by about 0.47% over the last 24 hours. The coin is also currently worth 1.11% less than it was seven days ago.
