The United States Internal Revenue Service (IRS) issued new staking guidance for cryptocurrency exchange-traded products.
The update creates a safe harbor for staking that lets certain crypto ETFs and crypto trusts earn staking rewards and distribute them to investors under defined terms.
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The guidance appears on the IRS website and applies to products that meet specific structural and custody conditions.
The IRS and the Department of the Treasury described how eligible exchange-traded products that hold digital assets can take part in staking programs while staying within tax rules.
The framework covers exchange-traded products traded on a national securities exchange and designed around a single digital asset.
It connects staking activity with tax treatment inside regulated structures.
Treasury Secretary Scott Bessent highlighted the change in a post on X on Monday.
He said the agencies had given crypto ETPs “a clear path to stake digital assets and share staking rewards with their retail investors.”
His comment linked crypto ETFs, staking rewards, and retail access within a regulated setup.
Conditions for crypto trusts under IRS staking guidance
The IRS staking guidance sets several conditions for crypto trusts and similar vehicles that want to use the safe harbor for staking.
First, the product must trade on a national securities exchange, placing it under existing securities market oversight.
Second, it must hold only cash and “units of a single type of digital asset,” not a basket of different tokens.
Third, the digital asset units must sit with a custodian.
That requirement keeps key management and asset control with a regulated entity rather than the fund sponsor.
It also aligns crypto ETFs and crypto trusts with custody standards already used in other exchange-traded structures.
Fourth, the trust has to address specific risks to investors while it earns staking rewards.
The guidance does not dictate a single model but links risk management directly to staking activity.
Under this approach, products can join staking pools or run validators, as long as they operate within the described guardrails.
Together, these conditions give crypto ETFs and crypto trusts a clear template for integrating staking rewards.
The IRS staking guidance brings asset composition, custody, trading venue, and risk controls into one framework.
Sponsors and custodians can use it when designing new products or assessing existing ones that may add staking.
Consensys counsel says IRS staking guidance removes legal barrier for crypto ETFs
The update drew a public response from Bill Hughes, senior counsel at Consensys.
In a Monday post on X, Hughes said,
“The impact on staking adoption should be significant.”
He described the safe harbor as “long-awaited regulatory and tax clarity for institutional vehicles such as crypto ETFs and trusts, enabling them to participate in staking while remaining compliant.”
Hughes also wrote that the guidance “effectively removes a major legal barrier that had discouraged fund sponsors, custodians, and asset managers from integrating staking yield into regulated investment products.”
His comments point to earlier hesitation around staking inside crypto ETFs and crypto trusts, driven by uncertainty over tax and rule treatment.
With the new IRS staking guidance, these products now have a written reference for using staking rewards.
The document also refers to US Securities and Exchange Commission (SEC) actions.
The IRS and Treasury noted the SEC decision in September to approve generic listing standards for crypto ETFs.
Those SEC crypto ETF standards are expected to support the approval process for more digital asset exchange-traded funds.
By citing the SEC crypto ETF standards, the tax agencies linked the safe harbor for staking to a broader regulatory direction.
The combined steps describe how crypto ETFs can trade on exchanges, hold a single digital asset, place it with a custodian, and still earn staking rewards.
In practice, the IRS staking guidance now sits at the point where tax rules, securities oversight, and product design for crypto trusts meet.
Disclosure:This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Kriptoworld.com accepts no liability for any errors in the articles or for any financial loss resulting from incorrect information.
Tatevik Avetisyan is an editor at Kriptoworld who covers emerging crypto trends, blockchain innovation, and altcoin developments. She is passionate about breaking down complex stories for a global audience and making digital finance more accessible.
📅 Published: November 11, 2025 • 🕓 Last updated: November 11, 2025
