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Treasury and IRS Clear Path for Crypto ETFs to Stake and Share Rewards

Revenue Procedure 2025-31 creates a safe harbor that preserves grantor‑trust tax status under strict custody, liquidity and disclosure conditions.

Overview

  • The guidance, effective immediately, lets eligible exchange‑traded products and trusts stake on permissionless proof‑of‑stake networks without jeopardizing investment‑trust or grantor‑trust treatment.
  • To qualify, products must hold only one digital asset plus cash, use a qualified custodian, employ an independent staking provider at arm’s‑length terms, and limit activities to holding, staking and redeeming.
  • Operational guardrails require exchange‑approved liquidity for redemptions, transparent reporting, protections against validator slashing, and distribution of staking rewards to investors at least quarterly.
  • The framework covers networks such as Ethereum and Solana, giving asset managers tax clarity to pass staking yields to shareholders through regulated vehicles.
  • Existing funds have nine months to amend trust documents and custody arrangements, with industry expectations that some ETFs could begin offering staking features by mid‑2026.