U.S. Treasury and IRS Issues New Guidance for Crypto ETF Staking

Highlights:

• IRS and Treasury allow crypto ETFs to stake digital assets and share rewards.
• Safe harbor rules provide tax clarity for trusts and support institutional staking.
• Bitcoin and Ethereum ETFs can earn rewards directly, which makes crypto funds more attractive.

The U.S. Treasury and the Internal Revenue Service (IRS) have published new guidance that allows crypto exchange-traded funds (ETFs) to participate in staking and distribute staking rewards to retail investors. Treasury Secretary Scott Bessent shared the update on X. He said the new rules give ETP issuers a clear way to stake digital assets for investors. The plan brings staking under regulated products and follows current tax and compliance rules. 

Staking lets cryptocurrencies like Ethereum and Solana check and secure network transactions. Validators earn rewards for this work. Until now, U.S. crypto ETFs could not stake, even though regular crypto holders earned rewards. The new rules change this, and ETFs can stake through custodians like Coinbase Custody, BitGo, or Gemini, which work with validators. They must give rewards to investors at least every three months.

Today @USTreasury and the @IRSnews issued new guidance giving crypto exchange-traded products (ETPs) a clear path to stake digital assets and share staking rewards with their retail investors.

This move increases investor benefits, boosts innovation, and keeps America the…

— Treasury Secretary Scott Bessent (@SecScottBessent) November 10, 2025

New IRS Rules Unlock Staking Opportunities for Crypto Funds and Trusts

Bessent said the new policy is an important step to help more investors take part in digital assets while keeping proper oversight. “This move increases investor benefits, boosts innovation, and keeps America the global leader in digital asset and blockchain technology,” he added. The 18-page guidance answers long-standing questions about whether staking could affect a trust or ETF’s tax qualification.

To be eligible as per the new rules, crypto ETFs and trusts need to adhere to the following key requirements. They must hold only one class of digital assets and cash. They must make use of qualified custodians to manage keys and engage with staking. SEC-approved liquidity rules must be followed to ensure investors can withdraw holdings even during staking. The agreements with the staking providers must be separate entities. The activities must be only holding, staking, and redeeming.

Bill Hughes, senior counsel at Consensys, on X said this step could greatly boost staking adoption. He added that the safe harbor gives long-awaited tax and regulatory clarity for institutional investors. It allows crypto ETFs and trusts to stake while staying fully compliant. “In short, Revenue Procedure 2025-31 transforms staking from a compliance risk into a tax-recognized, institutionally viable activity, accelerating mainstream adoption across proof-of-stake blockchains,” Hughes added.

Under the safe harbor that @SecScottBessent announces below, trusts may stake digital assets (on permissionless proof-of-stake networks) if they:

1) Hold only one digital asset type and cash;

2) Use a qualified custodian to manage keys and execute staking;

3) Maintain… https://t.co/husxmIpAs6

— Bill Hughes 🦊 (@BillHughesDC) November 10, 2025

Crypto ETFs Gain Opportunities as Markets Recover

Greg Xethalis, General Counsel at Multicoin Capital, said the new guidance gives a “safe harbor” and transition time for crypto ETF trusts. It lets them stake digital assets without losing their grantor trust status. He said this rule is important for tax clarity and solves a major problem in crypto investment products. The move is expected to allow Bitcoin and Ethereum ETF issuers to stake assets and earn rewards directly. This could make crypto funds more appealing than traditional investments and attract more institutional investors.

Guidance is out and available at the link below. This will create a safe harbor (and transition period) for ETP Trusts to stake trust assets without violating their tricky grantor trust status (which limits sponsor discretion and management). Link below: https://t.co/GXIdGzdrDW

— Greg Xethalis (@xethalis) November 10, 2025

The news comes as lawmakers work to end the long U.S. government shutdown. Cryptocurrencies are starting to rise again as investors feel more confident. Bitcoin is above $105,000, and altcoins like Ethereum, Solana, and Avalanche are also recovering.