SEC Commissioner Peirce Suggests Reconsideration of Ethereum ETF Staking

“There were features of the product that some people would have liked to see included but weren't...”

Key Takeaways

• SEC Commissioner Hester Peirce argued that the option of including staking in Ethereum ETFs could be reviewed.  
 

• Peirce is hopeful about current legislative attempts to set legal frameworks for the crypto industry.
 

• The SEC's current approach to crypto regulation has been dubbed "Enforcement-First," a strategy which might change with the results of the U.S. presidential elections.  

SEC Commissioner Hester Peirce has left the door open for the Ethereum ETF to be reviewed in the future. The discussion is timely as it comes only days before Ethereum ETFs are set to start trading. Ms Peirce, who is the commissioner, has been supportive of cryptocurrencies and added her sentiments by saying,  

"I think certainly something like staking, or any feature of the product — we saw that on the Bitcoin exchange traded products too, right? There were features of the product that some people would have liked to see included but weren't — those are always open for reconsideration as far as I'm concerned."  

However, not all SEC Commissioners would subscribe to her view. This is important because, in the initial ETH ETF filings, there were options for staking, but these were removed in May, just before the final approval of ETFs. This move could have responded to the position taken by SEC Chair Gary Gensler that staking was an investment contract.  

During the recent interview at Coinage, Commissioner Peirce also covered the new applications on Solana SOL/USD exchange-traded products from VanEck and 21Shares. She noted that one might contemplate these methods of preserving the markets from manipulation as a stand-alone approach.  

Peirce welcomed Congress's current efforts to establish legal guidelines for crypto projects, pointing in particular to the House of Representatives' approval of the FIT21 bill. Thus, she hoped this legislative achievement would help minimize such hindrances and bureaucratic procedures in introducing new crypto-based financial instruments.  

These comments are timely and relevant as the cryptocurrency and digital assets industry is at a crossroads.  

Crypto Regulation Set to Shift Gear  

The SEC's stance towards crypto has been quite assertive, with an "Enforcement-First" model that entails opening cases against numerous firms in the crypto space. However, this might be the case before the next elections.  

If the former president of the U.S., Donald Trump, wins, the situation may become more beneficial for the cryptocurrency industry. Thus far, he has left the crypto community believing he would support the cryptocurrency ecosystem, not approve CBDCs, and support the right to hold funds.  

On the other hand, if Joe Biden remains in Office for four more years, the SEC might shift, and the Biden administration may appoint a new Chair to succeed Gensler, who has recently become an antagonist in the crypto industry.