Grayscale's Ethereum ETF Begins Paying Staking Rewards
Grayscale has made the first-ever distribution of Ethereum staking rewards to shareholders of its U.S. spot crypto exchange-traded product (ETHE), marking a shift from limiting regulated crypto products to price tracking toward including protocol-level income. ETHE shareholders received $0.083178 per share in rewards earned from October 6, 2025, through the end of the year, with the payout based on holdings as of January 5. This move follows Grayscale’s 2023 introduction of staking features in its Ethereum ETPs, and aligns with subsequent U.S. Treasury and IRS guidance clarifying tax and regulatory aspects of staking rewards. The change could set a precedent for packaging proof-of-stake assets publicly, as staking rewards are a main source of returns for blockchains like Ethereum but were previously excluded from U.S. spot crypto ETFs due to regulatory uncertainties. Grayscale’s move tests the ability to distribute such protocol-level income under the Securities Act of 1933, without invoking stricter requirements for registered investment companies.
