ARK Invest removes staking feature from its Ethereum spot ETF filing

ARK
Invest
and
21Shares
have
amended
their
S-1
form
for
the
proposed
spot
Ethereum
exchange-traded
fund
(ETF)
by
removing
the

staking
component,
as
shown
in
a

filing
dated
May
10.

In
February,
the
two
firms
updated
their
filing
with
the
option
to
stake
Ethereum,
in
addition
to
cash-only
redemption.
Staking
is
considered
a

good
way
for
fund
managers
to
profit
from
the
large
amounts
of
crypto

that
ETFs
can
hold
beyond
just
earning
management
fees.

However,
at
the
time,
experts
suggested
that
ARK
Invest’s

staking
proposal
for
Ethereum
was
more
of
a
“probe”
to
test
the
Securities
and
Exchange
Commission’s
(SEC)
response
rather
than
a
confident
expectation
that
it
would
be
approved
by
the
securities
agency.

The
SEC
has
indicated
that
staking
could
classify
the
asset
as
a
security,
which
is
undesirable
for
spot
Ethereum
ETFs.
Last
year,
the
SEC
fined
Kraken
and

demanded
a
halt
to
its
staking
services.

Legendary
trader
Peter
Brandt
said
in
a
recent
post
on
X
that
the
SEC

is
going
to
crack
down
on
staking.

If
the
crypto
community
is
upset
over
the

@SECGov
treatment
of

$XRP,

$ETH
et
al
as
securities,

Prediction:
Wait
until
the

@USOCC

@SECGov

@USTreasury
do
a
full
assault
attack
over
staking

It’s
going
to
be
a
bloodbathhttps://t.co/CnXEusSAvG

—
Peter
Brandt
(@PeterLBrandt)

May
9,
2024

The
latest
amendment
to

ARK
Invest’s
application
fuels
speculation
about
ongoing
discussions
between
the
SEC
and
spot
Ethereum
ETF

applicants,
suggesting
that
the
applications
are
being
modified
to
align
with
SEC
preferences.

The
reasons
for
ARK
Invest’s
recent
modification
remain
undisclosed,
as
no
official
statements
have
been
made
by
the
involved
parties.

Crypto
analysts

are
marking
May
as
a
critical
month
for
the
future
of
these
spot
Ethereum
ETFs.
The
SEC
is
expected
to

make
a
decision
on
VanEck’s
filing
on
May
23.

The
general
consensus
among
analysts
is
that

the
filing
will
likely
be
rejected.

Earlier
this
week,
Grayscale,
the
world’s
leading
digital
asset
manager,

withdrew
its
bid
for
Ethereum
futures
ETF,
potentially
to
avoid
sole
responsibility
for
legal
challenges
in
case
of
a
denial
from
the
SEC.

[Updated
with
ARK
Invest’s
amendment
in
February,
Kraken’s
case,
and
Peter
Brandt’s
statement]