BlackRock has updated its SEC filing for a proposed staked Ethereum ETF, outlining how it plans to collect staking income. The amended filing shows the fund will charge a 0.25% expense ratio. It also reveals BlackRock will retain 18% of total Ethereum staking rewards.
BlackRock Staked Ethereum ETF Filing Shows 18% Staking Cut
The amended registration filing covers the iShares Staked Ethereum Trust ETF, expected to trade on Nasdaq Stock Market LLC under the ticker ETHB. BlackRock disclosed that the fund will stake between 70% and 90% of its Ethereum holdings.
However, it will retain some ETH in liquid form for redemptions, fees, and risk management. Unlike BlackRock’s spot Ethereum ETF, ETHA, this product includes staking as a core strategy. The filing also states a 12-month waiver to reduce the sponsor fee, which is, after the waiver, 0.12% for the first $2.5 billion of trust assets.
The sponsor fee is different from the staking fee since it is expressed as an annualized percentage of the trust’s net asset value (NAV), while the staking fee is noted as a percentage of staking consideration.
The filing states that staking rewards earned in ETH will increase the fund’s NAV. Additionally, shareholders would receive distributions at least quarterly, after fees are deducted. The staking-related service providers may charge additional costs.
SEC Guidance and Custody Providers Included in the Plan
The updated filing comes after recent SEC guidance on staking income. Reports cited in the provided information say the SEC classified staking rewards as earned income instead of capital gains. As a result, the filing frames staking as a structure that reduces tax complexity for institutions.
Previously, BlackRock outlined how the ETF would manage custody and staking operations. The filing names Coinbase Custody and Anchorage Digital as possible providers supporting the staking process. However, it also states BlackRock may pause staking based on security, regulatory, or operational concerns.
The filing further notes that staking rewards remain taxable income under current IRS rules. It also explains that the sponsor will manage staking activity carefully to maintain grantor trust status.
While BlackRock is working on ETHB, Harvard has adjusted its ETF holdings. As Coingape reported, the institution sold 1.48 million shares of BlackRock’s Bitcoin ETF, IBIT, and invested in BlackRock’s Ethereum ETF, ETHA. Meanwhile, the Ethereum price has remained volatile.
At the time of writing, Ethereum was trading at $1,966 and was down by 41.03% in the past month. Meanwhile, Lookonchain reported fresh crypto deposits linked to the firm. BlackRock deposited another 1,701 BTC worth $115.2 million and 22,661 ETH worth $44.5 million to Coinbase Prime.
Source: https://coingape.com/blackrock-amends-filing-for-staked-ethereum-etf-eyes-18-of-staking-rewards-from-eth-fund/
