On 19 August 2025, the United States Securities and Exchange Commission (US SEC) published notice of a proposed rule change filed by Cboe BZX Exchange, Inc. The filing seeks approval to amend the governing rule for the VanEck Ethereum ETF to permit staking of ether held by the trust under BZX Rule 14.11(e)(4), which governs commodity-based trust shares. The proposal, filed on 6 August 2025, would allow the sponsor to stake all or part of the trust’s ether through staking providers, with rewards accruing to the trust. The US SEC is seeking public comment under File No. SR-CboeBZX-2025-114 before determining whether to approve, disapprove, or institute disapproval proceedings.
The US SEC’s notice was issued under Release No. 34-103743; File No. SR-CboeBZX-2025-114.
The VanEck Ethereum ETF was approved for listing on 23 May 2024 under BZX Rule 14.11(e)(4), which applies to commodity-based trust shares. The rule allows shares issued by a trust holding a specified commodity, such as ether, to be listed and traded on the exchange.
Proposed Amendment: Staking of Ether
The exchange proposes to insert a new section on staking into the ETF’s governing rule. According to the text: “The Sponsor may stake, or cause to be staked, all or a portion of the Trust’s ether through one or more trusted staking providers. In consideration for any staking activity in which the Trust may engage, the Trust would receive all or a portion of the staking rewards generated”.
Key features include:
- Only ether already held by the trust will be staked.
- The sponsor will not pool assets with third parties or advertise staking services.
- Rewards will be treated as income of the trust.
- Custody remains with the custodian, ensuring ether cannot leave the trust’s control.
Staking Process and Regulatory References
The filing describes the Ethereum network’s transition to proof-of-stake in September 2022, where validators stake a minimum of 32 ether to propose or verify blocks. Malicious validator actions can result in “slashing” penalties.
The sponsor states that its staking activities will be consistent with the US SEC’s Division of Corporation Finance statement of 29 May 2025 on certain protocol staking activities, ensuring compliance with securities law and avoiding treatment as an unregistered securities offering.
The filing distinguishes the trust’s approach from prior enforcement cases against Kraken, Binance, and Coinbase, which involved pooled retail staking programs.
Statutory Basis for the Proposal
The Cboe BZX Exchange argued that the amendment meets the standards of Section 6(b)(5) of the United States Securities Exchange Act, as it is designed “to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and to protect investors and the public interest”.
Allowing staking would:
- Improve the trust’s ability to track returns from ether.
- Increase efficiency in share creation and redemption.
- Provide investors with exposure to staking rewards while maintaining safeguards against manipulation.
Next Steps and Comment Process
The US SEC will decide within 45 to 90 days whether to approve, disapprove, or open disapproval proceedings.
Public comments must reference File No. SR-CboeBZX-2025-114 and can be submitted via the US SEC’s rule comment portal or by email to rule-comments@sec.gov.
(Source: https://www.sec.gov/files/rules/sro/cboebzx/2025/34-103743.pdf)
