According to a February 12 File With the US Securities and Exchange Commission (SEC), CBOE BZX Exchange has submitted a request that seeks approval to make within 21Shares Ethereum (ETH) Exchange-Traded Fund (ETF).
CBOE Seeking Ethereum ETF Staking Approval
The CBOE BZX exchange has archived to Sec to allow ETH held in 21Shares Core Ethereum ETF to be inserted. If approved, ETF will be able to invest its ETH holdings, which allows investors to earn rewards on their Ethereum holdings.
For the uninitiated, Staking is one of the cornerstones of the Ethereum protocol. Blockchain switched from a proof-of-work consensus mechanism to a proof-of-stake) system in September 2022. Under the POS model, network participants can invest their ETH to validate transactions and earn rewards in return.
While SEC approved its first Ethereum etf 2024, it explicitly banned at that time, with reference to potential violations of federal securities laws. This restriction led large cryptocurrency exchanges such as coinbase and the kraken to interrupt Their efforts for us customers.
However, Sec’s attitude can change after Donald Trump’s victory in the US presidential election in 2024. The agency now has new leadership, reportedly consisting of more pro-crust officials.
This is in sharp contrast to the former administration under the former SEC chairman Gary Gensler. The new leadership change probably encouraged the CBOE BZX exchange to submit its request for Ethereum ETF stake services.
In its application, the CBOE BZX exchange has proposed to use a “touch-and-click” test mechanism. This method of intervention differs from the more traditional in that it does not require ETH to be moved to third parties to have staked. Rather, it allows ETF to invest their ETH holdings directly from its custody wallet.
While the touch-and-click effort mechanism reduces the likelihood of any security compromise or infringement, it does not fully take potential implication. To work out, penalties, penalties for validers who violate network rules are introduced, leading to partial or complete loss of their fenced ETH.
To strengthen its case, the CBOE BZX exchange claimed to be prohibited to knit for 21Shares Ethereum ETF is similar to preventing an ETF from distributing dividends to its investors. The company claims that surrounding rewards should be treated in the same way as dividends, as they represent an extra return generated from keeping access.
ETH price reacts to having news
After CBOE BZX Exchange’s archiving at Sec, ETH experienced a sharp price increase. The second largest cryptocurrency by market value increased from $ 2,547 to a high of $ 2,795 before stabilization.
Similarly, ETH-Staking-related tokens, such as Lido (LDO), experienced a remarkable price collection. LDO increased from $ 1.46 to a top of $ 1.84 before starting at his current price of $ 1.66 at the time of writing. At press time, ETH is $ 2,633, an increase of 2.3% over the past 24 hours.
