VanEck Scraps Lido Staked Ethereum ETF After Months of Regulatory Uncertainty

VanEck Digital Assets has requested the withdrawal of its proposed Lido Staked Ethereum ETF registration, ending nearly a year of regulatory proceedings. The company filed the request with the U.S. Securities and Exchange Commission (SEC), abandoning its plan to introduce a listed product that would have given brokerage investors access to staked Ether.

The filing seeks to withdraw the registration statement, related amendments, and accompanying exhibits under Rule 477 of the Securities Act of 1933. The application is listed under registration number 333-290918, following VanEck’s original S-1 filing on October 16, 2025.

VanEck confirmed that it will no longer move forward with distributing shares of the proposed fund. The filing states that the registration statement never became effective, no securities were issued or sold under the application, and no preliminary prospectus was circulated.

Since the proposed ETF never launched, its withdrawal does not involve existing shareholders or require the sale of assets to cover redemptions. No fund holdings need to be liquidated, and investors have no shares to redeem. VanEck asked the SEC to make the withdrawal effective as of October 14 or at the earliest practicable date afterward.

The proposed product was designed to hold stETH, Lido’s liquid-staking token, rather than LDO, the protocol’s governance token. Its intended strategy was to track stETH’s price performance after expenses while incorporating staking rewards through a passive structure based on a MarketVector benchmark.

Ethereum ETFs remain influenced by institutional demand and changing investment flows, but VanEck’s decision means this particular product will not enter the market. The filing does not specify the reasons behind the company’s decision to abandon the proposal.

Understanding the Proposed Staked Ether Investment Product

Lido enables users to stake ETH through its protocol and receive stETH in return. The token represents their staking position and associated rewards, with its rebasing mechanism capable of increasing the token balance as rewards accrue.

Unlike a conventional spot Ether ETF, the proposed VanEck fund would have held stETH directly. This would have exposed investors to the liquid-staking token’s market behavior and the risks associated with the protocol, rather than simply tracking the price of ETH.

The prospectus highlighted several potential risks, including validator penalties, smart-contract vulnerabilities, liquidity limitations, and fluctuations in Ethereum’s market value. These factors could have affected the value of the fund’s holdings and its overall performance.

In August 2025, SEC staff published a statement addressing certain liquid-staking activities. The guidance distinguished qualifying staking arrangements from activities involving managerial or entrepreneurial efforts, but it was conditional and did not automatically approve ETFs holding liquid-staking tokens.

Ethereum’s underlying technology continues to evolve, including through testing related to the network’s gas limit. However, technical improvements do not automatically resolve regulatory uncertainty or eliminate the risks associated with liquid-staking investment products.

Lido Initially Supported VanEck’s ETF Proposal

The Lido Ecosystem Foundation welcomed VanEck’s application in October 2025, describing the proposal as a potential bridge between liquid staking and traditional financial markets. Kean Gilbert, identified at the time as the foundation’s head of institutional relations, also highlighted the potential significance of institutional staking products.

In its announcement, Lido reported that users had earned more than $2 billion in staking rewards since the protocol launched. The foundation also placed Lido’s total value locked at approximately $40 billion.

VanEck has not announced whether it will submit a new application involving Lido or pursue another exchange-traded product linked to staking. For now, the withdrawal ends the current registration process before the proposed ETF could reach investors.