Notice2025-14561
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Proposed Rule Change To Amend the iShares Ethereum Trust To Permit Staking of Ether Under Nasdaq Rule 5711(d) (Commodity-Based Trust Shares)
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 1, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 146 (Friday, August 1, 2025)</title>
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[Federal Register Volume 90, Number 146 (Friday, August 1, 2025)]
[Notices]
[Pages 36206-36207]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-14561]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103561; File No. SR-NASDAQ-2025-053]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing of Proposed Rule Change To Amend the iShares Ethereum
Trust To Permit Staking of Ether Under Nasdaq Rule 5711(d) (Commodity-
Based Trust Shares)
July 29, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\, and Rule 19b-4 thereunder,\2\ notice is hereby given
that on July 16, 2025, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been substantially prepared by
the Exchange. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the iShares Ethereum Trust (the
``Trust''), shares (the ``Shares'') of which have been approved by the
Commission to list and trade on the Exchange pursuant to Nasdaq Rule
5711(d), to permit staking of ether held by the Trust.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/nasdaq/rulefilings">https://listingcenter.nasdaq.com/rulebook/nasdaq/rulefilings</a>
and at the principal office of the Exchange.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Commission approved the listing and trading of the Shares on
the Exchange pursuant to Nasdaq Rule 5711(d) \3\ on May 23, 2024.\4\
iShares Delaware Trust Sponsor LLC, a Delaware limited liability
company and an indirect subsidiary of BlackRock, Inc. (``BlackRock''),
is the sponsor of the Trust (the ``Sponsor''). Coinbase Custody Trust
Company, LLC (the ``Ether Custodian'') is the custodian for the Trust's
ether holdings, and maintains a custody account for the Trust
(``Custody Account''); Coinbase, Inc. (the ``Prime Execution Agent''),
an affiliate of the Ether Custodian, is the prime broker for the Trust
and maintains a trading account for the Trust (``Trading Account'');
and The Bank of New York Mellon is the custodian for the Trust's cash
holdings (the ``Cash Custodian'') and the administrator of the Trust
(the ``Trust Administrator'').\5\
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\3\ Nasdaq Rule 5711(d) governs the listing and trading of
Commodity-Based Trust Shares, which means a security (1) that is
issued by a trust that holds (a) a specified commodity deposited
with the trust, or (b) a specified commodity and, in addition to
such specified commodity, cash; (2) that is issued by such trust in
a specified aggregate minimum number in return for a deposit of a
quantity of the underlying commodity and/or cash; and (3) that, when
aggregated in the same specified minimum number, may be redeemed at
a holder's request by such trust which will deliver to the redeeming
holder the quantity of the underlying commodity and/or cash. See
Nasdaq Rule 5711(d)(iv)(A).
\4\ See Securities Exchange Act Release No. 100224 (May 23,
2024), 89 FR 46937 (May 30, 2024) (Self-Regulatory Organizations;
NYSE Arca, Inc.; The Nasdaq Stock Market LLC; Cboe BZX Exchange,
Inc.; Order Granting Accelerated Approval of Proposed Rule Changes,
as Modified by Amendments Thereto, To List and Trade Shares of
Ether-Based Exchange-Traded Products) (``Spot ETH ETP Approval
Order'').
\5\ See Securities Exchange Act Release No. 100212 (May 22,
2024), 89 FR 46556 (May 29, 2024) (SR-NASDAQ-2023-045) (Notice of
Filing of Amendment No. 2 to a Proposed Rule Change To List and
Trade Shares of the iShares Ethereum Trust Under Nasdaq Rule
5711(d)) (``Amendment No. 2'').
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The Exchange now proposes to amend several portions of Amendment
No. 2, as amended, to allow the staking of ether held by the Trust.\6\
Except for the changes described below, all other representations in
Amendment No. 2, as amended, remain unchanged and will continue to
constitute continued listing requirements. In addition, the Trust will
continue to comply with the terms of Amendment No. 2, as amended, and
the requirements in Rule 5711(d).
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\6\ The Exchange has also filed a separate rule change proposal
to amend portions of Amendment No. 2 to allow for in-kind creations
and redemptions. See Securities Exchange Act Release No. 103095 (May
21, 2025), 90 FR 22525 (May 28, 2025) (SR-NASDAQ-2025-038).
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Description of the Trust
The Exchange first proposes to amend the Amendment No. 2 section
entitled ``Description of the Trust'' by deleting the following
representation:
Neither the Trust, nor the Sponsor, nor the Ether Custodian (as
defined below), nor any other person associated with the Trust will,
directly or indirectly, engage in action where any portion of the
Trust's ETH becomes subject to the Ethereum proof-of-stake
validation or is used to earn additional ETH or generate income or
other earnings.
Staking
Next, the Exchange proposes to add the following ``Staking''
section after the ``Custody of the Trust's Ether and Creation and
Redemption'' section in Amendment No. 2:
Staking
The Sponsor may stake, or cause to be staked, all or a portion
of the Trust's ether through one or more trusted staking providers
(``Staking Providers''). In consideration for any staking activity
in which the Trust may engage, the Trust would receive all or a
portion of the staking rewards generated by the Staking Provider,
which may be treated as income to the Trust.
The Sponsor's use of Staking Providers for staking activities on
behalf of the Trust will be conducted through a custodial
arrangement, consistent with the May 29, 2025 statement issued by
the Division of Corporation Finance's statement, entitled ``Certain
Protocol Staking Activities'' (``Corp Fin Statement'').\7\ The
Sponsor may seek to utilize alternative means to engage in staking
activities, subject to its determination that the Trust may do so
without undue legal,
[[Page 36207]]
regulatory or tax risk and consistent with the Corp Fin Statement.
The Sponsor's engagement in any staking activities on behalf of the
Trust is contingent upon it receiving an opinion of counsel or
guidance from the U.S. government on the U.S. federal income tax
treatment of staking activities by the Trust.
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\7\ See Division of Corporation Finance, Statement on Certain
Protocol Staking Activities (May 29, 2025), available at <a href="https://www.sec.gov/newsroom/speeches-statements/statement-certain-protocol-staking-activities-052925">https://www.sec.gov/newsroom/speeches-statements/statement-certain-protocol-staking-activities-052925</a>.
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Staking by the Sponsor on Behalf of the Trust
The Sponsor expects to maintain sufficient liquidity in the
Trust to satisfy redemptions. Any ether staked, or cause to be
staked by the Sponsor on behalf of the Trust will consist
exclusively of ether owned by the Trust.
First, the Sponsor will only stake, or cause to be staked, the
ether held by the Trust. The Sponsor will not seek to pool the ether
held by the Trust with ether held by other entities. Second, the
Sponsor will not advertise itself as providing any staking services
generally, or promise any specific level of return from staking, or
solicit delegated stakes from entities other than the Trust. Third, the
Sponsor will stake, or cause to be staked, the Trust's ether solely in
order to preserve the assets of the Trust by contributing to the
security of the network and to capture economic value for the Trust's
shareholders. Fourth, the Sponsor will not bear or subsidize the risk
of slashing or forks on behalf of the Trust.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\8\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\9\ in particular, in that it is designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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The Exchange believes the proposed rule change is designed to
remove impediments to and perfect the mechanism of a free and open
market and, in general, to protect investors and the public interest
because it would allow the Trust to stake its ether on behalf of its
investors. The Ethereum network allows for staking of its native asset,
ether, and permits validators who successfully stake ether to receive
block rewards. The net beneficiaries are not only validators, or those
on behalf of whom they stake ether, but also the Ethereum blockchain
itself, which grows and is progressively made more secure through the
validation of transactions. Staking permits validators to contribute to
network security and functionality. Validators are compensated for
fulfilling this important role through block rewards.
Allowing the Trust to stake its ether would benefit investors and
help the Trust to better track the returns associated with holding
ether. This would improve the creation and redemption process for both
authorized participants and the Trust, increase efficiency, and
ultimately benefit the end investors in the Trust.
Except for the changes described above, all other representations
in Amendment No. 2, as amended, remain unchanged and will continue to
constitute continued listing requirements for the Trust. In addition,
the Trust will continue to comply with the terms of Amendment No. 2, as
amended, and the requirements in Rule 5711(d).
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. As discussed above, the
proposed amendments are intended to benefit investors and allow the
Trust to better track the returns associated with holding ether. The
Exchange believes these changes will not impose any burden on
competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission shall: (a) by order approve
or disapprove such proposed rule change, or (b) institute proceedings
to determine whether the proposed rule change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#cab8bfa6afe7a9a5a7a7afa4beb98ab9afa9e4ada5bc"><span class="__cf_email__" data-cfemail="d5a7a0b9b0f8b6bab8b8b0bba1a695a6b0b6fbb2baa3">[email protected]</span></a>. Please include
file number SR-NASDAQ-2025-053 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-NASDAQ-2025-053. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing will be available for inspection and
copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to file number SR-NASDAQ-2025-053 and should be submitted
on or before August 22, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-14561 Filed 7-31-25; 8:45 am]
BILLING CODE 8011-01-P
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