We’re So Close: SEC Holds High-Level Meeting for Feature That Could Ignite Cryptocurrency Market

The U.S. Securities and Exchange Commission’s (SEC) Crypto Task Force recently held talks with Jito Labs and Multicoin Capital to explore the feasibility of incorporating staking into cryptocurrency exchange-traded products (ETPs), according to meeting notes published by the regulator.

The meeting, which comes roughly two weeks after the task force was formed, shows that the SEC continues to review various proposals for Solana (SOL) ETFs amid a surge in applications from asset managers seeking to list alternative crypto-based investment products. VanEck, a prominent asset manager, was the first to file for a SOL ETF last year, aiming to take advantage of potential regulatory changes that could favor the sector, particularly if former President Donald Trump wins the upcoming election.

Discussions moved beyond theoretical frameworks to focus on practical staking models that could be integrated into ETFs, according to the notes. Participants in the meeting included Multicoin Capital Managing Partner Kyle Samani, General Counsel Greg Xethalis, Jito Labs CEO Lucas Bruder, and Chief Legal Officer Rebecca Rettig, as well as representatives from the SEC.

The meeting notes focused on the potential benefits of staking in crypto ETPs. “Restricting staking in crypto asset ETPs harms (i) investors by reducing the efficiency of the underlying asset and depriving investors of potential returns, and (ii) network security by preventing a significant portion of an asset’s circulating supply from being staked,” the document said.

Staking is a process that involves using validators to secure a proof-of-stake blockchain network by locking up assets, which in turn generates rewards. The SEC’s task force is reportedly considering two possible approaches: allowing a portion of an ETP’s assets under management to be staked through validator service providers, or issuing a liquid staking token for each asset staked to facilitate redemption options.

Despite the potential benefits, the SEC has historically been cautious about approving staking ETFs due to concerns about asset lock-up periods that potentially delay investor refunds, tax implications, and whether staking-as-a-service constitutes a securities transaction.

*This is not investment advice.