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ARK Invest Makes Crucial Amendment to SEC Filing for ETH ETF

ARK Invest and 21 Shares recently made a surprising move by removing the mention of Ether (ETH) staking from their SEC applications for a spot ETH ETF launch in the U.S. This change was noticed by Fox Business correspondent Eleanor Terrett on May 10, 2024.

Previously, the firms had plans to stake a portion of ETH once their spot Ethereum ETF was approved. They intended to use trusted staking providers for this purpose. If successful, the ETH staking rewards would be treated as income and taxed accordingly.

However, the firms also acknowledged the risks associated with ETH staking, such as potential loss of tokens through the “slashing” procedure in Ethereum’s PoS and temporary lack of access to ETH locked in staking contracts.

This move comes amidst increased regulatory scrutiny on crypto staking activities by U.S. authorities. In the past, the SEC has targeted exchanges like Kraken and Coinbase over their staking programs, alleging unregistered securities operations.

Some experts speculate on the reasons behind ARK Invest and 21 Shares’ decision to remove ETH staking terms from their applications. Bloomberg’s Eric Balchunas expressed skepticism about the move, suggesting it could be a strategic maneuver to avoid potential rejection by the SEC.

The SEC recently delayed decisions on spot ETF approvals for other asset managers like Invesco Galaxy, Franklin Templeton, and Grayscale. While spot Bitcoin ETFs were approved earlier in 2024, the fate of spot ETH ETFs remains uncertain as regulatory scrutiny continues.

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