ARK AND 21SHARES DROP STAKING PLANS FROM ETHEREUM ETF PROPOSAL

Last updated: June 19, 2025, 22:55 | Written by: Barry Silbert

The race to launch the first spot Ethereum ETF in the United States has taken an unexpected turn. ARK Invest and 21Shares have decided to remove the crypto staking feature from their Ethereum (ETH) exchange-traded fund (ETF) proposal. The decision to eliminate staking from the ETF structure follows successful discussions with the U.S. securities regulator, leading to a transition to a cashARK Invest and 21Shares, two prominent firms vying for approval, have recently amended their proposal, notably removing plans for ETH staking.This decision, documented in their updated filing submitted on May 10th, marks a significant shift in strategy and raises questions about the future of Ethereum ETFs and the role of staking within them. ARK Invest, an investment management firm, and 21Shares, a cryptocurrency exchange firm, have decided to drop the staking plans from their updated spot Ethereum ETF proposal. In the updated filing submitted on May 10, the duo has scrapped the part that said 21Shares would stake a portion of the fund s assets through third-party providers. Before, it mentioned, Sponsor may, from time toInitially, their proposal included a clause detailing 21Shares' intention to stake a portion of the fund’s assets through third-party providers. Bloomberg ETF analyst Erich Balchunas suggests the update may be a response to potential SEC feedback despite no official comments.Continue reading ARK and 21Shares drop staking planThis feature aimed to generate additional yield for ETF holders, potentially making the product more attractive.However, the updated filing reveals a stark absence of this clause, signaling a strategic pivot away from integrating staking rewards directly into the ETF. Ark Invest and 21 Shares dropped staking plans in their updated spot Ethereum ETF proposal on May 10. The firms previous Feb. 7 filing added a clause Ark Invest, 21Shares drop staking from spot Ethereum ETF proposalWhat led to this change? BTCUSD Bitcoin ARK and 21Shares drop staking plans from Ethereum ETF proposal. Bloomberg ETF analyst Erich Balchunas suggests the update may be a response to potential SEC feedback despite noAnd what implications does it have for investors and the broader crypto market? ARK and 21Shares drop staking plans from Ethereum ETF proposalLet's delve into the details and explore the possible reasons behind this bold move by ARK Invest and 21Shares.

Understanding the Initial Ethereum ETF Proposal with Staking

When ARK Invest and 21Shares jointly applied for a spot Ether ETF in September 2023, they included an intriguing feature: crypto staking. Ark Make investments and 21 Shares dropped staking plans of their up to date spot Ethereum ETF proposal on Could Ark Invest, 21Shares drop staking from spot Ethereum ETF proposal - Financials Up SaturdayThe original plan, outlined in their February 7th filing, stated that ""Sponsor may, from time to time, stake a portion of the Trust's assets through one or more trusted Staking Providers."" This meant that 21Shares, acting as the sponsor, could delegate a portion of the Ethereum held by the ETF to validators, who would then participate in securing the Ethereum network and earn rewards in the form of additional ETH.

The concept of incorporating staking into an ETF was viewed by many as a potential game-changer.It offered a way for investors to gain exposure to Ethereum and potentially earn passive income through staking rewards, all within the familiar structure of a traditional investment vehicle.This approach could have made the ETF more appealing to a wider audience, including those who are hesitant to directly engage with crypto staking themselves due to technical complexities or security concerns.

Benefits of Including Staking in an Ethereum ETF

Enhanced Returns: Staking rewards could increase the overall returns of the ETF, making it a more attractive investment.
Passive Income: Investors could earn passive income in the form of additional ETH without actively managing their holdings.
Simplified Staking: The ETF would handle the technical aspects of staking, making it accessible to a broader audience.
Increased Demand: The potential for staking rewards could drive greater demand for the ETF, boosting its value.

The Strategic Shift: Why Remove Staking?

The decision to remove staking from the Ethereum ETF proposal raises a crucial question: why? ARK Invest and 21Shares removed their staking plans from their updated spot Ethereum ETF proposal, submitted on Friday, May 10. In the updated filing submSeveral factors likely contributed to this strategic shift.While ARK Invest and 21Shares haven't explicitly stated their reasons, industry experts speculate that regulatory concerns and the desire to expedite the approval process played a significant role.

One of the primary reasons for the change is the ongoing scrutiny from the SEC (U.S. Ark Invest and 21 Shares dropped staking plans in their updated spot Ethereum ETF proposal on May 10. The firms previous Feb. 7 filing added a clause detailing that the sponsor 21 Shares intended to stake a portion of the fund s assets through third-party providers.Securities and Exchange Commission).The SEC has consistently delayed providing comments or decisions on ETH ETFs, indicating a cautious approach towards these novel investment products. ARK Invest and 21Shares removed their staking plans from their updated spot Ethereum ETF proposal, submitted on Friday, May 10. In the updated filing submitted on Friday, there is a noticeable absence of a clause stating that 21Shares would stake a portion of the fund s assets through third-party providers.The inclusion of staking introduces additional complexities from a regulatory standpoint, as it raises questions about the nature of the rewards and whether they should be considered securities. ARK Invest and 21Shares have removed staking plans from their updated spot Ether exchange-traded fund proposal.In the updated filing submitted on Friday, May 10, the clause stating 21Shares would stake a portion of the fund s assets through third-party providers was removed. It previously said, SpBy removing staking, ARK Invest and 21Shares may be aiming to simplify the proposal and address potential regulatory hurdles, increasing the likelihood of approval.

Bloomberg ETF analyst Erich Balchunas suggests that the update may be a response to potential SEC feedback, even in the absence of official comments.This indicates that ARK Invest and 21Shares are proactively attempting to align their proposal with the SEC's expectations, based on indirect cues and industry observations.This strategic move could be seen as a calculated risk, sacrificing the potential benefits of staking for a higher chance of securing approval for their Ethereum ETF.

Possible Reasons for Removing Staking

Regulatory Uncertainty: The SEC's stance on crypto staking remains unclear, creating uncertainty for ETF issuers.
Approval Delays: The inclusion of staking could further delay the approval process for the ETF.
SEC Concerns: The SEC may view staking rewards as securities, raising regulatory red flags.
Simplified Proposal: Removing staking simplifies the proposal and potentially increases its chances of approval.

The Impact of the Removal on Investors

The removal of staking from the Ethereum ETF proposal has both positive and negative implications for potential investors.On one hand, it may increase the likelihood of the ETF being approved, providing a regulated and accessible way to gain exposure to Ethereum.On the other hand, investors will miss out on the potential for staking rewards, which could have enhanced the ETF's overall returns.

For investors who are primarily interested in gaining exposure to the price movements of Ethereum, the removal of staking may not be a major concern.They may view the ETF as a convenient and cost-effective way to invest in ETH without having to worry about the technical aspects of staking or the security risks associated with holding ETH directly. ARK Invest and 21Shares removed staking plans from their spot Ethereum ETF proposal, submitted on May 10, amid SEC delays and dwindling approval hopes.However, for investors who were attracted to the ETF specifically because of the staking feature, the removal may be a disappointment.

Ultimately, the impact of the removal on investors will depend on their individual investment goals and risk tolerance. [ ] Civitai Faces Angry Users After Banning Kinky Content From its AI Art Site Cryptocurrency [ ] Australian election will bring pro-crypto laws either way RegulationThose who prioritize simplicity and regulatory compliance may welcome the change, while those who are seeking higher returns and are comfortable with the risks of staking may be less enthusiastic.

Potential Impact on Investors

Increased Approval Chances: The ETF may have a higher chance of being approved by the SEC.
Simplified Investment: Investing in Ethereum through the ETF becomes simpler and more straightforward.
Missed Staking Rewards: Investors will not receive staking rewards, potentially reducing overall returns.
Lower Returns Compared to Staking Directly: The ETF may offer lower returns compared to staking ETH directly.

The Broader Implications for the Ethereum ETF Landscape

The decision by ARK Invest and 21Shares to remove staking from their Ethereum ETF proposal has broader implications for the entire Ethereum ETF landscape.It suggests that the SEC may be hesitant to approve ETFs that incorporate staking, at least in the near term. The SEC has consistently delayed comments or decisions regarding ETH ETFs. Ark Invest and 21Shares take a bold gamble by removing staking from their proposal. With days left until the deadline, 21Shares hopes to prompt a response from the SEC.This could lead other issuers to follow suit and remove staking from their proposals as well.

Indeed, other prospective Ethereum ETF issuers have also shown skepticism toward staking. ARK Invest and 21Shares have removed staking plans from their updated spot Ether exchange-traded fund proposal.In the updated filing submitted on Friday, May 10, the clause stating 21Shares would stake a portion of the fund s assets through third-party providers was removed. It previously said, Sponsor may, fromFidelity also dropped staking plans in its amended S-1 forms. ARK and 21Shares drop staking plans from Ethereum ETF proposal Bloomberg ETF analyst Eric Balchunas suggests the update may be a response to potential SECVanEck, Franklin Templeton, and Invesco Galaxy also dropped the staking from their filings.However, Hashdex has yet to amend its filing.

If the SEC ultimately approves spot Ethereum ETFs that do not include staking, it could pave the way for a wave of similar products to enter the market. ARK Invest and 21Shares have decided to remove the crypto staking feature from their Ethereum (ETH) exchange-traded fund (ETF) proposal. The decision to eliminate staking from the ETF structure follows successful discussions with the U.S. securities regulator, leading to a transition to a cash creation and redemption model.These ETFs would provide investors with a convenient and regulated way to gain exposure to Ethereum, but they would not offer the potential for staking rewards.This could lead to a more fragmented market, with different ETFs catering to different investor preferences.

Potential Effects on the Ethereum ETF Market

Standardization: Future Ethereum ETFs may become standardized without staking.
Increased Competition: More issuers may enter the market with non-staking ETFs.
Fragmented Market: Different ETFs may cater to different investor preferences (staking vs. non-staking).
Lower Overall Returns: The absence of staking may lead to lower overall returns for Ethereum ETFs.

Cash Creation and Redemption Model

The decision to eliminate staking from the ETF structure has led to a transition to a cash creation and redemption model. ARK Invest and 21Shares have omitted their staking plans from the updated spot Ethereum ETF proposal submitted on Friday, May 10. The revised filing on Friday no longer includes a clause indicating that 21Shares would stake a portion of the fund s assets through third-party providers, which previously stated, Sponsor may, from time to time, stake a portion of the Trust s assets throughThis model is commonly used in traditional ETFs and simplifies the process of creating and redeeming shares.In a cash creation model, authorized participants (APs) purchase the underlying assets (in this case, Ethereum) and deliver them to the ETF in exchange for new shares. ARK and 21Shares drop staking plans from Ethereum ETF proposalBloomberg ETF analyst Erich Balchunas suggests the update may be a response to potential SEC feConversely, when redeeming shares, the APs deliver shares to the ETF and receive cash in return.

This model offers several advantages.It's relatively simple to implement and understand, and it reduces the potential for conflicts of interest. Meanwhile, the three prospective Ethereum ETF issuers were not alone in staking skepticism. Earlier this week, Fidelity dropped staking plans in its amended S-1 forms. VanEck, Franklin Templeton, Invesco Galaxy, and ARK 21Shares also dropped the staking from their filings. However, Hashdex has yet to amend its filing.It also provides greater transparency and liquidity, as the price of the ETF shares is closely tied to the price of the underlying assets.

By adopting a cash creation and redemption model, ARK Invest and 21Shares are aligning their Ethereum ETF with the standard practices of the ETF industry.This could make the ETF more appealing to institutional investors and other traditional market participants who are familiar with this model.

What Happens Next: The SEC's Decision and the Future of Ethereum ETFs

The future of spot Ethereum ETFs in the United States hinges on the SEC's decision.With the May deadlines looming, the pressure is on for the regulatory body to provide clarity on its stance. ARK Make investments and 21Shares eliminated their staking plans from their up to date spot Ethereum ETF proposal, submitted on Friday, Could 10. Within the up to date submitting submitted on Friday, there s a noticeable absence of a clause stating that 21Shares would stake a portion of the fund s belongings by means of third-partyThe removal of staking from the ARK Invest and 21Shares proposal, along with similar moves by other issuers, suggests that the industry is anticipating a cautious approach from the SEC.A decision regarding approval or disapproval is expected in the near future.

If the SEC approves spot Ethereum ETFs, it would be a major milestone for the cryptocurrency industry.It would provide a regulated and accessible way for a wider range of investors to gain exposure to Ethereum, potentially driving significant demand for ETH. ARK and 21Shares drop staking plans from Ethereum ETF proposal Bloomberg ETF analyst Eric Balchunas suggests the update may be a response to potential SEC feedback despite no official comments.However, if the SEC rejects the proposals, it would be a setback for the industry, potentially delaying the launch of spot Ethereum ETFs for months or even years. ARK Invest, an investment management firm, and 21Shares, a cryptocurrency exchange firm, have decided to drop the staking plans from their updated spot Ethereum ETF proposal. In the updated filing submitted on May 10, the duo has scrapped the part that said 21Shares would stake a portion of the fund s assets through third-party providers.A rejection could also indicate that the SEC has fundamental concerns about Ethereum and other cryptocurrencies, which could have broader implications for the regulatory landscape of the industry.

Regardless of the SEC's decision, the evolution of Ethereum ETF proposals highlights the ongoing innovation and adaptation within the cryptocurrency industry.As the regulatory environment evolves and investor preferences change, ETF issuers will continue to refine their products to meet the needs of the market. ARK and 21Shares drop staking plans from Ethereum ETF proposal Bloomberg ETF analyst Erich Balchunas suggests the update may be a response to potential SEC feedback despite no official comments.The future of Ethereum ETFs remains uncertain, but the journey so far has been a fascinating glimpse into the intersection of traditional finance and the world of crypto.

Conclusion: Key Takeaways on the Ethereum ETF and Staking Decision

ARK Invest and 21Shares' decision to drop staking plans from their Ethereum ETF proposal marks a significant shift driven by regulatory uncertainty and the desire for faster approval. ARK and 21Shares Amend Ethereum ETF Proposal, ARK and 21Shares drop staking plans from Ethereum ETF proposal cointelegraph.com 2 Like Comment Share Copy; LinkedInWhile this move potentially increases the likelihood of the ETF's launch, it also means investors will miss out on potential staking rewards. Ark Invest and 21 Shares have recently made changes to their spot Ethereum ETF proposal. The firms, known for their involvement in the cryptocurrency industry, had initially intended to incorporate staking into the fund s assets through third-party providers.The broader implications suggest a possible trend toward non-staking Ethereum ETFs and a greater emphasis on simpler, more compliant investment vehicles. Previously, the proposal indicated that 21Shares might engage in staking some of the ETF s assets through third-party providers, as stated, Sponsor may, from time to time, stake a portion of the Trust s assets through one or more trusted Staking Providers. However, this language has been omitted from the latest submission.The SEC's upcoming decision will be crucial in shaping the future of Ethereum ETFs and the integration of digital assets into mainstream finance. ARK Invest and 21Shares have altered their proposed spot Ether exchange-traded fund (ETF) by dropping staking support from their plan. In September 2025, ARK Invest and 21Shares jointly applied for a spot Ether ETF.For investors, it is critical to weigh the benefits of regulatory compliance against the potential for enhanced returns through staking when considering Ethereum ETFs.The world of crypto is constantly evolving, and staying informed is paramount to making sound investment decisions.Keep an eye on SEC announcements for more information.