SEC Considers Staking Integration in Exchange-Traded Products

• SEC’s Crypto Task Force discusses incorporating staking in exchange-traded products with Jito Labs and Multicoin Capital.
• Two staking models for ETPs were proposed: validator-run staking and liquid staking tokens for Solana’s SOL.
• The SEC’s evolving stance could lead to new opportunities for investors in regulated cryptocurrency investment products.

On February 5, 2025, the U.S. Securities and Exchange Commission (SEC) hosted a crucial meeting with Jito Labs and Multicoin Capital to evaluate the potential integration of staking in exchange-traded products (ETPs). This marks a significant step in the SEC’s ongoing efforts to develop a clearer regulatory framework for cryptocurrency investment products.

Discussion on Staking Models in ETPs

During the meeting, the SEC’s Crypto Task Force focused on two potential models for incorporating staking into ETPs. The first model proposes staking a portion of the assets within an ETP through service providers that operate validators. This model would allow investors to receive staking rewards while ensuring that liquidity for redemptions remains intact.

The second model, which uses liquid staking tokens (LSTs), such as JitoSOL for Solana’s SOL, would involve holding only staked versions of the native asset in the ETP. This structure ensures liquidity while offering staking rewards. 

Shifting Regulatory Stance on Crypto Investments

The SEC has introduced a major transformation into their regulatory stance regarding cryptocurrency investment products during the last several months. A revised leadership team at the agency conducted actions that clarified digital asset investment guidelines. The creation of the Crypto Task Force during this year shows the SEC’s change from using enforcement only to actively working with members of the industry.

The shifting regulatory position happened after Cboe BZX submitted its proposal to integrate staking capabilities in the 21 Ishares Core Ethereum ETF. The SEC had originally urged ETP applications to eliminate staking features from their platforms yet current indications reveal the agency might review past decisions about such policies. Discussing this topic shows potential changes coming to crypto investment regulations.

These cryptocurrency investment structure reviews by the SEC are likely to produce results that will affect many people. Including staking in ETPs offers potential new investment opportunities to customers who receive staking rewards through regulated products.