U.S. Senator Cynthia Lummis, serving as Chair of the Senate Banking Subcommittee on Digital Assets, has reached out to the Securities and Exchange Commission (SEC) seeking clarification on its stance concerning protocol staking in digital asset exchange traded products (ETPs). The request was made in a bipartisan letter co-signed by Senators Kirsten Gillibrand, Steve Daines, Ron Wyden, Thom Tillis, Bill Hagerty, and Bernie Moreno.
In their communication to the SEC, the senators expressed concern over the “current lack of availability of protocol staking for these issuers,” which they argue affects the investment potential of digital asset ETPs within the United States. They further highlighted that this limitation challenges “the competitive positioning of U.S. asset managers in the global market.” The senators pointed out that ETPs in Canada and Europe do not face such restrictions.
The letter specifically criticized the SEC’s policy of not allowing certain digital asset ETP issuers to incorporate protocol staking into their S-1 filings. According to the senators, this practice is “undermining the consensus mechanisms underpinning certain digital assets” and weakening “the resilience and integrity of the data stored on certain distributed ledgers.”
The group has requested detailed responses from the SEC by March 21, 2025. The full text of their letter is publicly accessible.
