SEC Delays Grayscale's Ethereum ETF Staking to June 1, WisdomTree and VanEck's In-Kind Redemptions to June 3

The U.S. Securities and Exchange Commission (SEC) has delayed its decision on allowing Grayscale's spot Ethereum ETFs, including the Grayscale Ethereum Trust ETF and Grayscale Ethereum Mini Trust ETF, to engage in staking until June 1, 2025. Staking involves pledging Ethereum to the network to participate in its proof-of-stake validation system, enabling the validation of transactions and earning rewards of 2-7% yield. Since their launch in 2024, these ETFs have seen a significant inflow of $2.28 billion.

The SEC has also postponed its decision on in-kind creations and redemptions for WisdomTree and VanEck's spot Bitcoin and Ethereum ETFs until June 3, 2025. In-kind transactions involve the direct exchange of the underlying assets, such as Bitcoin and Ethereum, instead of cash. NYSE Arca and Cboe BZX are the exchanges associated with these proposals.

These delays occur amidst a turbulent time for the cryptocurrency market, with Ethereum's price having fallen 15% to $1,640 over the past month. The SEC's approach to these proposals could signal its broader regulatory strategy towards cryptocurrencies, especially with the recent appointment of Paul Atkins as the new SEC Chairman.

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