- The US Treasury and IRS have created a safe harbour allowing crypto ETPs and trusts to stake proof-of-stake assets and distribute rewards to investors.
- Strict conditions apply, including national exchange listing, single-asset holdings, approved custodians, independent staking providers, and liquidity rules.
- Industry leaders welcomed the move, saying it resolves long-standing legal uncertainty around staking, while the timing overlaps with efforts to end a US government shutdown.
A new regulatory update from the US Treasury Department and the IRS has granted crypto investment trusts and ETPs the ability to participate in staking and to distribute rewards, marking a significant shift for institutional products tied to proof-of-stake networks. Treasury Secretary Scott Bessent revealed the policy on X, emphasising that it provides crypto ETPs “a clear path to stake digital assets and share staking rewards with their retail investors”.
To qualify for the safe harbour, a trust must trade on a national securities exchange, hold only cash and one digital asset, and rely on an authorised custodian to mitigate investor risks. The trust may only hold, stake, and redeem the selected asset and must enlist an independent staking provider while adhering to liquidity standards.
The regulatory status of staking rewards has challenged the industry for years. During the Biden administration, the SEC suggested staking returns could be considered unregistered securities, contributing to caution among fund issuers. This stance influenced last year’s spot Ethereum ETF approvals, which excluded staking. Grayscale recently broke ground by offering ETH staking rewards through a US ETF.
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Positive Market Reactions
Reactions from the crypto sector have been favourable. Consensys’ Bill Hughes said the safe harbour eliminates major legal obstacles that previously deterred fund managers and custodians from incorporating staking yields. Patrick Witt, representing the Council of Advisors for Digital Assets, linked the announcement to recommendations made in a White House report earlier this year.
The timing coincides with congressional efforts to end a prolonged government shutdown that had furloughed staff at both the IRS and SEC since 1 October.
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