SEC’s Staking Standstill: ETFs Maneuver Through Legal Maze While Crypto Industry Seeks Clear Guidance

The U.S. crypto sector is undergoing a significant transformation as

staking ETFs gain attention amid regulatory challenges and shifting investor preferences. REX-Osprey™, a partnership between REX Shares and Osprey Funds, introduced the first Ethereum staking ETF, ESK, in September 2025, providing investors with direct access to spot Ethereum and monthly staking payouts REX-Osprey Launches First Ethereum Staking ETF in the U.S. [ 1 ]. The ETF blends direct staked ETH with exchange-traded vehicles that both hold and stake ETH, ensuring all staking rewards are passed on to shareholders REX-Osprey Launches First Ethereum Staking ETF in the U.S. [ 1 ]. This development comes after the successful launch of the REX-Osprey™ + Staking ETF (SSK) in July 2025, which has already accumulated more than $300 million in managed assets REX-Osprey Launches First Ethereum Staking ETF in the U.S. [ 1 ].

The introduction of these ETFs marks a strategic move around conventional regulatory channels. By organizing ESK and SSK as 1940 Act funds with subsidiaries in the Cayman Islands, REX-Osprey™ avoided the SEC’s 19b-4 approval process, a strategy Bloomberg’s James Seyffart called a “creative legal solution” REX Shares Files Innovative ETFs for ETH, SOL Staking [ 3 ]. This setup enables the funds to both hold and stake ETH and SOL while remaining compliant with U.S. laws. However, the C-corporation structure brings tax drawbacks, as corporate taxes can diminish investors’ net returns REX Shares Files Innovative ETFs for ETH, SOL Staking [ 3 ].

The SEC’s cautious approach to staking ETFs has led to ongoing uncertainty. In September 2025, the agency postponed decisions on Ethereum staking ETF applications from

, Fidelity, and Franklin Templeton, moving final verdicts to October and November 2025 SEC Delays Ethereum Staking ETF Approvals to October 2025 [ 4 ]. The SEC explained that more time was needed to assess risks such as custody, potential market manipulation, and how staking rewards should be classified. For example, BlackRock’s iShares Ethereum Trust is now scheduled for a decision by October 30, 2025, while the proposals from Fidelity and Franklin Templeton have been extended into November SEC Delays Decision On Staking For BlackRock’s Ethereum ETF [ 6 ].

These regulatory delays are shaping market trends. Ethereum’s value climbed to $4,100 in September 2025, fueled by institutional interest in spot ETFs but limited by the lack of staking options SEC Delays Ethereum Staking ETF Approvals to October 2025 [ 4 ]. Experts suggest that ETFs with staking features could attract additional capital by offering both yield and price exposure, something missing from current crypto investment products SEC Delays Ethereum ETF Staking: What’s Next? - capwolf.com [ 5 ]. The REX-Osprey™ approach, which pays out staking rewards to investors, has already gained traction, as seen in SSK’s $33 million trading volume on its first day.

Despite regulatory obstacles, many in the industry expect staking ETFs to become more widespread. Seyffart noted that the SEC’s proposed Generic Listing Standards, which could simplify the approval process for crypto ETFs, may help future products reach the market more quickly REX Shares Files Innovative ETFs for ETH, SOL Staking [ 3 ]. For now, the focus on Ethereum and Solana staking ETFs highlights the potential for these products to reshape institutional involvement in digital assets. As of September 2025, over 90 crypto ETF filings are still awaiting review, with the SEC’s careful approach reflecting ongoing debates about fostering innovation while protecting investors SEC Delays Decision On Staking For BlackRock’s Ethereum ETF [ 6 ].

The relationship between regulatory holdups and investor demand is redefining Ethereum’s investment landscape. While spot ETFs have encouraged institutional adoption, the lack of staking features restricts yield opportunities. REX-Osprey™’s model, which incorporates staking rewards within a regulated structure, helps fill this gap but adds complexity. The SEC’s ultimate decision on staking ETFs will likely influence whether Ethereum’s investment model shifts toward a more yield-focused approach, in line with broader trends in institutional crypto investing.