VanEck's New Stance on BNB ETF Involves No Staking Following Regulatory Challenges
VanEck alters its plan for the BNB ETF by eliminating staking options, aiming to mitigate regulatory risks highlighted in their recent SEC filing.
VanEck has restructured its approach regarding the BNB ETF by withdrawing all plans to engage in staking of assets. This decision diverges from its Solana product, where staking is actively encouraged, as the firm seeks to navigate potential regulatory hazards.
In an updated S-1 filing submitted to the U.S. Securities and Exchange Commission (SEC), VanEck disclosed that, “the Trust will not employ its BNB in Staking Activities and accordingly will not earn any form of staking rewards or income…” The filing further cautions that there is no certainty that the Trust will ever engage in staking activities.
This change follows VanEck’s previous proposal for a spot BNB ETF in May, where they had indicated a willingness to stake a percentage of assets through trusted third-party providers. By minimizing staking involvement, the company acknowledges that it might lead to less favorable ETF performance compared to simply holding BNB, as potential staking rewards will not be realized.
VanEck’s Regulatory Concerns with BNB
In its recent filing, VanEck made it clear that any staking would be conducted via third-party services, and there are no guarantees of future staking. They expressed caution regarding the SEC’s evaluation of BNB as a potential security: “The test for determining whether a particular digital asset is a ‘security’ is complex and difficult to apply….” The company maintains that the Trust’s management currently views BNB not as a security, but acknowledges that this perspective may change.
This cautious reexamination comes in light of the SEC’s recent legal actions against several cryptocurrency platforms, which included classifying BNB among other digital assets as securities. The ongoing debate surrounding the treatment of staking under securities law continues, complicating matters further. There remains significant uncertainty about the regulatory framework governing staking services.
Related: Grayscale launches Solana ETF, entering into competition in the staking sector.
This shift in strategy illustrates VanEck’s proactive stance in addressing regulatory scrutiny while navigating the dynamic landscape of cryptocurrency offerings.
