SEC’s Peirce Criticizes Approval of Ethereum ETF Staking

Hester Peirce, one of the SEC Commissioners, is at least amenable to the notion of enabling staking in Ethereum ETFs in the future.

By locking down Ethereum to contribute to the blockchain’s security, staking earns 4% yearly return in new coins. Issuers such as VanEck and Fidelity had originally planned this functionality, but it was taken out prior to their approval in May.

ARTICLE: Spot Ethereum ETFs could soon include staking, says SEC's Hester Peirce. How possible is that? Find out:https://t.co/lj1cTFDR1Z

— BSCN (@BSCNews) July 17, 2024

Commissioner Peirce hinted that if Ethereum ETFs begin trading, the decision to forbid staking would be reevaluated in a recent interview. She added that later on, features omitted from Bitcoin ETFs were also given another look. Peirce did point out that not all of the SEC Commissioners would agree with her viewpoints.

Compared to the Bitcoin ETF approval process, the Ethereum ETF approval process was less traditional. Ethereum ETFs were approved by the SEC’s Trading and Markets division in lieu of a vote by Commissioners. Commissioner Peirce highlighted her dissatisfaction with the convoluted approval procedure, stating that it ought to be simple and drama-free. According to her, goods should just be free to sell so that the market determines their worth.

Even without staking, analysts predict that these ETFs will see high demand. Sean Farrell of Fundstrat forecasts that over the first several months of trading, they may draw in net inflows of more than $5 billion. Next week is when the new Ethereum ETFs are scheduled to go live.

BREAKING: SEC Commissioner Hester Peirce says Ethereum ETF staking "always open for reconsideration as far as I'm concerned" in new Coinage interview

Coins | $ETH #Ethereum pic.twitter.com/5UQgIxp3PF

— Coinage (@coinage_media) July 17, 2024

Staking was left out of the original ETF offerings because SEC Chair Gary Gensler had previously declared that it constituted an investment contract. Regarding whether the SEC ordered or willingly removed stakes, Commissioner Peirce remained silent.

In conclusion, although staking will not be required at launch for Ethereum ETFs, it is possible that it will be in the future. Commissioner Peirce’s more accommodating attitude toward bitcoin laws is evident in her willingness to reevaluate staking and other product features after the ETFs start trading.