A group of United States senators is urging the SEC to clarify its position on protocol staking in ETPs. At the same time, Hester Pierce, the SEC commissioner, promises more clarity and says she’s open to permitting staking features for ETH-USD ETFs and revisiting the commission’s previous decisions.
Led by Senator Cynthia Lummis, the lawmakers sent a letter to the SEC on February 20 questioning why the SEC has repeatedly excluded staking from ETP issuers’ S-1 filings.
While the commission has allowed multiple digital asset ETPs to register, it has not allowed issues to include protocol staking in the filings.
The senators say that by excluding staking, the agency undermines competitiveness in the U.S. and hampers investors who might otherwise gain from staking’s rewards.
Critics of the SEC’s stance say it hinders U.S. product offerings compared to those in Canada, Europe, and the United Kingdom, where digital asset ETPs with staking are available.
On February 5, the SEC’s Crypto Task Force held discussions with Jito Labs CEO Lucas Bruder, Multicoin Capital’s Kyle Samani, and legal experts from both organizations.
During that meeting, industry representatives floated two proposals. One would allow a portion of the ETP’s assets to be staked through third-party validators. Another would see ETPs hold so-called “liquid staking tokens,” which represent staked assets. A Solana-based ETP could, for example, include a liquid staking derivative like JitoSOL.
SEC Commissioner Hester Pierce promises more clarity for the crypto industry
SEC Commissioner Hester Peirce, often called “Crypto Mom” by supporters in the crypto world, has indicated she wants to provide clarity to the industry. Speaking with Yahoo Finance, Peirce said she hopes the Commission can move toward a workable legal framework that clarifies how certain digital assets are categorized without leaving participants fearful of lawsuits. She also chairs a new SEC crypto task force formed after the Trump administration took office.
Peirce’s new role has encouraged some industry leaders. Paul Grewal, Coinbase’s chief legal officer, said the change at the SEC could mark a turning point. He noted that, during Gary Gensler’s tenure leading the agency under the Biden administration, the commission adopted a stricter approach through lawsuits and enforcement actions. Coinbase also faced a lawsuit in which the commission claimed that many tokens on the exchange were unregistered securities. Grewal believes the new SEC team, led by acting Chair Mark Uyeda and Peirce, will take a different path—one that could include clearer rules.
Coinbase expects a vote next Thursday on whether the SEC will drop its lawsuit against the company. Grewal credits Peirce and Uyeda for “turning the page from Gary Gensler’s misguided campaign of regulation by enforcement” and for starting fresh discussions with the sector. Under the previous administration, the commission rarely provided specialized guidance for digital assets. Instead, it argued that existing securities laws already covered most cryptocurrencies and launched enforcement actions against projects it believed were out of compliance.
Peirce has called for a new approach. In a statement titled “There Must Be Some Way Out of Here,” she asked the public to share feedback on how the SEC should address cryptocurrency offerings and market structure. She suggested that one idea could be allowing digital asset coin offerings to be deemed non-securities for a set time, provided the issuer meets certain disclosure requirements and does not contest fraud charges brought by regulators. This arrangement would apply to both past and future offerings.
Pierce is open to staking features in ETPs
Peirce also said she remains open to permitting staking and options for ETH-USD ETFs and revisiting the decision not to approve options for ether-based products. During the last administration, the SEC allowed the spot of Bitcoin and Ether ETPs and even authorized options for Bitcoin ETPs, yet it did not approve staking or options on Ether ETFs.
Separately, Peirce was asked about the Department of Government Efficiency (DOGE), established by Elon Musk, and whether it has had any direct role at the commission. She said she could not confirm such details, but public records show DOGE claimed $206,000 in savings by canceling commission’s media subscriptions, including Politico Pro and Reuters.
Meanwhile, President Donald Trump signed an executive order directing independent agencies to submit major regulations to the Office of Management and Budget for review. Peirce said this office can be “really helpful” for economic analysis and solving problems.
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