BlackRock has submitted a registration application to the U.S. Securities and Exchange Commission for a new Ethereum exchange-traded fund that includes staking. The proposed product, called the iShares Staked Ethereum Trust, is designed to give investors exposure to both Ethereum’s price movements and staking rewards through a single, publicly traded vehicle.
The filing comes roughly two months after Grayscale Investments became the first major issuer to enable staking for its Ethereum ETFs. Unlike Grayscale, BlackRock is not modifying its existing iShares Ethereum Trust (ETHA). Instead, it plans to launch a separate fund dedicated to staking. The current ETHA product, which manages around $11 billion in assets, will remain a spot-only ETF without staking features.
Custody and staking structure
According to the S-1 prospectus, the new trust intends to stake between 70% and 90% of its Ethereum holdings under normal market conditions. Coinbase Custody Trust Company will act as the primary custodian, while Anchorage Digital will serve as a backup provider to enhance operational resilience and risk diversification.
The trust will not run its own validator infrastructure. Instead, validator rights will be delegated by the custodian to third-party professional staking providers, a standard setup in institutional staking. Ethereum staking currently offers annual yields of roughly 3% to 5%, with average 2025 yields ranging between 3.5% and 4.2%. Over the 180 days ending September 2025, the CoinDesk Composite Ether Staking Rate averaged 2.98%.
Regulatory shift under new SEC leadership
The application reflects a major policy shift at the SEC. Under former chair Gary Gensler, the agency required issuers to strip staking features from ETF filings, arguing that staking services on platforms such as Kraken and Coinbase constituted unregistered securities offerings.
Since Paul Atkins took office as SEC chair in April 2025, the agency has softened its stance. In May 2025, the Division of Corporation Finance released guidance titled “Certain Protocol Staking Activities,” stating that protocol-level staking does not constitute a securities offering under federal law. While not a formal rule, the guidance provided enough legal clarity for large institutional issuers to move forward.
Following this shift, other asset managers have also updated their filings. VanEck filed an amendment in August 2025 to allow staking in its Ethereum ETF under Rule 14.11(e)(4) for commodity-based trust shares. The SEC’s decision on that proposal remains pending.
Quarterly distributions model
BlackRock’s new trust is structured to distribute staking rewards to shareholders at least quarterly, rather than automatically reinvesting them. This puts it closer to the income-focused model of the Grayscale Ethereum Trust, which makes periodic cash distributions. By contrast, the Grayscale Ethereum Mini Trust reinvests staking rewards back into the fund’s net asset value to create a compounding effect.
The difference has strategic and tax implications. Distribution-based ETFs generally create taxable income for investors, while accumulating structures can offer tax deferral. For institutions and income-focused investors, regular cash payouts are often more attractive than reinvestment.
An experienced fintech marketer, now diving into Web3, crypto markets, and decentralized systems. Breaking down complex blockchain developments for accessible understanding.
