Ark Invest removes staking from Ethereum ETF application

The new developments feed the hope that Ethereum spot ETFs will be approved on May 23. However, the situation remains unclear.

Ark Invest and 21Shares have removed plans for staking from their joint Ethereum ETF-application. This is evidenced by new documents filed with the U.S. Securities and Exchange Commission (SEC) on May 10.

The applicants had not inserted a corresponding clause until Feb. 7. This clause provided that "a portion of the fund's assets will be deployed from time to time by one or more trusted service providers."

The disappearance of the clause fueled speculation in the community about a surprise approval of the upcoming Ethereum spot ETF applications.

Bloomberg ETF analyst Eric Balchunas stated on X that the changes may have been agreed upon in response to comments from the U.S. Securities and Exchange Commission.

According to Balchunas, this would be "good news" because it is a sign of cooperation. The SEC's silence so far has given reason to believe that the agency will reject the ETF applications on May 23.

In addition, staking is apparently a thorn in the SEC's side. According to recent statements by SEC Chairman Gary Gensler, the revenue-generating feature of staking could make ETH qualify as an illegal effect. ETF applications without a staking would therefore be more likely to be approved, it is thought.

However, ETF analyst Balchunas also explained that, to his knowledge, there have been no official discussions between applicants and the SEC. Therefore, the decision could also be a desperate attempt by Ark to deny the SEC reasons for rejection, Balchunas said.

So while the crypto sector expects applications to be rejected in May, it eagerly awaits BlackRock's application.

The world's largest asset manager expects a decision on its Ethereum ETF on Aug. 7. In recent decades, only one ETF application from the asset manager has been rejected.