ARK Invest and 21Shares Remove Staking from Spot Ether ETF

May 11, 2024 at 07:35 PM GST updated: May 11, 2024 at 08:16 PM 2 mins read News

ARK Invest and 21Shares revised spot ether ETF proposal, removing staking provisions.
Analysts speculate on motives behind the amendment, amid uncertainty over SEC approval.
Initial optimism for spot ether ETFs dwindles as industry awaits regulatory clarity.

ARK Invest and 21Shares have changed their exchange-traded fund (ETF) proposal for spot ether. The updated filing, published on Friday, noticeably removes a stake component that was part of their original petition.

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This change represents an abrupt change from their previous position with the original filing outlining provisions for possible staking of a portion of the Trust’s assets through trusted Staking Providers. But the revised file noticeably leaves out any reference of stake arrangements.

Bloomberg ETF analyst Eric Balchunas commented on the development and offered a number of the possible explanations. Balchunas noticed the lack of public remarks from the regulating agency, even while he acknowledged the likelihood that this was a procedural change in response to SEC feedback.

Hmmmm. Interesting. While it may seem like this is them getting their docs in shape based on SEC comments (which would be good news) there hasn’t been any comments. So its prob either a Hail Mary or maybe trying to give SEC one less thing to use in their rejection. Not sure (yet) https://t.co/CeQwj5ktPn
— Eric Balchunas (@EricBalchunas) May 10, 2024

Remarkably, ARK Invest and 21Shares have held off on commenting on the updated filing right away, refusing to offer explanations for why the staking component was excluded. Their silence leaves industry watchers to conjecture about the reasons for this unannounced change.

Though there was early hope for spot ether ETF approval by the SEC, that optimism has faded in recent months. In a prior evaluation, Eric Balchunas had reduced the forecast of approval’s probability, pointing to a decline by late May from about 70% to 25%.

With stakeholders negotiating a complicated and changing environment shaped by regulatory scrutiny and market factors, this modification highlights the ambiguous regulatory environment surrounding Bitcoin ETFs.

The ARK Invest and 21Shares amendment to the spot ether ETF proposal adds a new angle to the continuing discussion about cryptocurrency investment products. The updated filing makes one consider the changing regulatory factors influencing the world of bitcoin investing while investors wait for more information.