Grayscale Ethereum Staking Mini ETF Proposes Trust Amendment for Staking Distributions

What Happened

• Grayscale Investments Sponsors, LLC (the Sponsor), as sponsor of Grayscale Ethereum Staking Mini ETF (ETH), filed an 8-K (Item 8.01) announcing it intends to execute a Third Amended and Restated Declaration of Trust and Trust Agreement on or around August 7, 2026. The revised Trust Agreement will be with CSC Delaware Trust Company, the Trust’s trustee, and will amend and restate the prior agreement dated September 25, 2025 (as amended).
• The Proposed Amendment would require the Trust to convert staking consideration to cash at least quarterly and promptly distribute the net cash proceeds of staking rewards to shareholders, net of any Trust expenses the Sponsor does not assume (including a portion payable to the Sponsor for facilitating staking). The Sponsor says the change is intended to conform the Trust’s staking program to IRS Revenue Procedure 2025-31 while preserving grantor trust tax status.

Key Details

• Anticipated execution date of the Proposed Amendment: on or around August 7, 2026.
• Distribution frequency required by the amendment: no less often than quarterly (cash conversions and prompt distributions).
• Sponsor provided 20 days’ prior notice to shareholders under Section 10.1 of the Trust Agreement.
• Amounts distributed will depend on staking consideration actually received and cannot be predicted with certainty; distributions are net of Trust expenses not assumed by the Sponsor.

Why It Matters

• For shareholders, the Trust moving to regular cash distributions of staking rewards can provide direct cash flows from staking activity rather than retention of staking consideration inside the Trust.
• The change is framed as necessary to comply with IRS guidance (Revenue Procedure 2025-31) to maintain the Trust’s tax classification; shareholders should consult tax advisors about any tax consequences.
• The timing and size of distributions are uncertain and depend on actual staking receipts and deductions for Trust expenses, so investors should not assume a fixed payout amount. The Trust also plans to file a prospectus supplement updating disclosure after the amendment’s execution.