TLDR
- The U.S. SEC has delayed its decision on whether the Franklin Ethereum ETF can stake its Ethereum holdings.
- Cboe BZX Exchange filed the rule change request on March 10, 2025.
- The SEC has started formal proceedings to assess whether staking aligns with investor protection rules.
- Section 6(b)(5) of the Securities Exchange Act is being used to evaluate market fairness and security.
- A public comment period has been opened with a 21-day window for initial submissions and 35 days for rebuttals.
The U.S. Securities and Exchange Commission has delayed its decision on whether the Franklin Ethereum ETF can stake its assets. The delay stems from a rule change request filed on March 10, 2025, by Cboe BZX Exchange, Inc. Instead, the SEC initiated proceedings to evaluate the implications of staking under regulatory frameworks.
The ETF seeks permission to stake its Ethereum and receive staking rewards similar to individual ETH holders. This strategy aims to generate additional returns from ETH holdings through passive income mechanisms. However, the SEC is now examining whether this change complies with market integrity and investor protection rules.
The agency cited Section 6(b)(5) of the Securities Exchange Act, which ensures exchanges prevent fraudulent and manipulative acts. The review will assess whether staking within an ETF structure aligns with fair and orderly market principles. This process will not result in immediate rejection but will extend the regulatory evaluation period.
SEC Opens Review on Ethereum ETF Staking
The SEC has opened a comment period for the public to provide feedback on the proposed ETF amendment. Stakeholders have 21 days from publication in the Federal Register to submit arguments, data, or opinions. Rebuttal comments are due within 35 days after the initial publication date.
The commission’s notice emphasized the need for a formal review process to evaluate potential investor risks and clarified that no final decision has been made regarding the stakeholder proposal. The delay allows the SEC to gather information while assessing the application’s regulatory compliance.
The proposal does not change any core ETF structure beyond allowing ETH staking through approved custodians. The final outcome depends on how the proposed staking aligns with statutory obligations. This review period will likely influence future ETF strategies involving blockchain validation methods.
Ethereum Market Metrics Remain Strong Amid Regulatory Scrutiny
Ethereum continues showing strength despite ongoing regulatory processes affecting ETF decisions and staking proposals. As of June 16, 2025, Ethereum reports a market capitalization of $319.47 billion. The digital asset also saw a 24-hour trading volume of $20.13 billion.
Over the past 30 days, Ethereum recorded a price increase of 6.79%, while its two-month performance showed a 68.14% surge. The price activity underscores investor confidence, even as regulatory bodies assess staking mechanisms. Ethereum maintains a market dominance of 9.49% as per CoinMarketCap data.
