On 29 July 2025, the US Securities and Exchange Commission (SEC) published a notice titled Release No. 34-103561; File No. SR-NASDAQ-2025-053 announcing a proposed rule change by The Nasdaq Stock Market LLC to amend the iShares Ethereum Trust. Filed under Section 19(b)(1) of the US Securities Exchange Act of 1934 and Rule 19b-4, the proposal aims to allow the Trust, sponsored by iShares Delaware Trust Sponsor LLC (a subsidiary of BlackRock, Inc.), to stake its etherium holdings. The Trust’s ether is custodied by Coinbase Custody Trust Company, LLC, with Coinbase, Inc. as the prime execution agent and The Bank of New York Mellon as the cash custodian and administrator. The US SEC’s notice invites public comments to evaluate the proposal’s compliance with regulatory standards, highlighting its cautious approach to cryptocurrency-based investment vehicles.
The proposed rule change seeks to amend Amendment No. 2 of the iShares Ethereum Trust’s listing approval, originally filed on 23 May 2024. The amendment removes the restriction that “Neither the Trust, nor the Sponsor, nor the Ether Custodian, nor any other person associated with the Trust will, directly or indirectly, engage in action where any portion of the Trust’s ETH becomes subject to the Ethereum proof-of-stake validation or is used to earn additional ETH or generate income or other earnings.” Instead, it authorises the Sponsor to stake the Trust’s ether to “preserve the assets of the Trust by contributing to the security of the network and to capture economic value for the Trust’s shareholders.” The Sponsor will stake only the Trust’s ether, avoiding pooling with other entities, and will not advertise staking services, promise specific returns, or bear risks like slashing or forks. Staking is contingent on legal or US government guidance on federal income tax treatment, as referenced in the Division of Corporation Finance’s “Statement on Certain Protocol Staking Activities” (May 2025). The proposal also updates the “Description of the Trust” section to reflect these changes. The Exchange argues that staking “would benefit investors and help the Trust to better track the returns associated with holding ether,” enhancing efficiency in creation and redemption processes.
The US SEC’s notice, issued on 29 July 2025, initiates a 45-day review period from the date of publication in the Federal Register, extendable to 90 days if the US SEC deems it necessary or Nasdaq consents. Within this period, the US SEC will approve, disapprove, or institute proceedings to determine whether to disapprove the proposal. The Trust’s listing was initially approved on 23 May 2024, as documented in Securities Exchange Act Release No. 102224 (89 FR 16997, 30 May 2024). The proposed amendment, filed on 29 July 2025, aims to align the Trust’s performance with Ethereum’s proof-of-stake mechanism, allowing investors to benefit from block rewards while contributing to network security. The US SEC’s review ensures compliance with investor protection and market integrity standards. From a legal perspective, the proposal’s alignment with Section 6(b)(5) of the US Securities Exchange Act, which promotes just and equitable trade principles and investor protection, is under evaluation.
The iShares Ethereum Trust was approved for listing on 23 May 2024, with a restriction prohibiting staking (Amendment No. 2). On 29 July 2025, Nasdaq filed to amend this restriction to permit staking, citing benefits to investors and network security. The US SEC issued the notice on 29 July 2025 to announce this proposal, solicit public comments, and initiate a review to ensure compliance with the US Securities Exchange Act. The notice facilitates transparency and stakeholder input, with comments due 21 days after Federal Register publication, referencing file number SR-NASDAQ-2025-053.
US SEC’s scrutiny will focus on legal, regulatory, and tax risks, particularly pending tax guidance. The proposal shows Nasdaq’s effort to integrate cryptocurrency mechanisms into regulated markets without imposing competitive burdens, as stated: “The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.” Stakeholders can submit comments via the US SEC’s website, ensuring robust regulatory engagement.
(Source: https://www.sec.gov/files/rules/sro/nasdaq/2025/34-103561.pdf)
