US Treasury Safe Harbor for ETH and SOL Crypto ETF Staking

On November 10, 2025, the US Treasury and IRS issued Revenue Procedure 2025-31, establishing a safe harbor for crypto ETF staking. The guidance allows spot ETFs to engage in crypto ETF staking of proof-of-stake assets like ETH and SOL through qualified custodians and distribute staking rewards quarterly. Rewards are taxed as ordinary income upon distribution, preserving the commodity-style ETF structure and avoiding entity-level taxes. Issuers must hold only cash and a single digital asset, disclose staking activity and risks such as slashing, and publish transparent reward reports. Analysts project annual yields of 3–5% for Ethereum ETFs and 5–7% for Solana products, subject to network conditions. Existing ETFs have nine months to amend trust agreements and can begin staking by mid-2026. Major issuers including BlackRock and Fidelity are expected to update prospectuses to integrate staking. This change removes regulatory uncertainty, levels the playing field with direct holders, may drive capital inflows, and could influence global frameworks such as the EU’s MiCA.