Today, 3iQ, a digital asset manager, announced that its two Ethereum exchange-traded funds (ETFs), The Ether Fund and The 3iQ Ether ETF, would offer staking to clients in August, making them the first ETFs in the world to do so. Staking is the process of “locking-up” cryptocurrency to keep a blockchain’s network running, and those who hold proof-of-stake assets, such as Ethereum (ETH), can receive rewards for pledging it to the network.
The funds will earn rewards in the form of ETH, which will be reflected in the net asset value of the funds, as well as increasing the funds’ exposure to ETH. 3iQ will use Coinbase’s institutional staking infrastructure to support ETH staking in the products, despite the fact that the SEC recently fined Coinbase, the largest crypto exchange in the US, for allegedly offering and selling unregistered securities via its staking service.
Unlike the US, Canadian regulators have not taken action against staking products, as evidenced by the SEC’s February fine of US crypto exchange Kraken for failing to register the offer and sale of its crypto asset staking-as-a-service program.
An ETF is an investment vehicle that tracks the value of an underlying asset, such as gold, foreign currencies, or cryptocurrency. 3iQ’s two Ethereum-based ETFs are listed on the Toronto Stock Exchange and are available to Canadian investors, not US ones.
