U.S. IRS announces guidance on allowing staking for crypto ETFs and trusts

The U.S. government has announced new tax guidance that allows virtual assets (cryptocurrencies) exchange-traded products (ETPs) and trusts to receive rewards through staking.

According to Cointelegraph on the 7th (local time), the U.S. Internal Revenue Service (IRS), an agency under the Treasury Department, said it has created a 'Safe Harbor' provision that allows cryptocurrency-related investment products to participate in staking and distribute rewards if they meet certain requirements.

The measure was disclosed directly by Treasury Secretary Scott Bessent on X (formerly Twitter), who explained, "This guideline provides a clear path for crypto ETPs to stake digital assets and distribute those rewards to retail investors."

According to the IRS website, eligible staking entities are trusts listed on a national securities exchange that hold only cash and a single digital asset, are managed by an authorized custodian (Custodian), and are structured to mitigate investor protection risks.

Bill Hughes, chief legal counsel at Consensys, said, "This Safe Harbor has resolved long-standing regulatory and tax uncertainties for institutional crypto ETFs and trust products," adding, "The major legal barriers that previously prevented fund managers or custodians from including staking proceeds in products have been removed."

The guidance is interpreted as the IRS and the Treasury Department taking follow-up measures to secure regulatory consistency after the U.S. Securities and Exchange Commission (SEC) approved crypto ETF listing standards last September.

Meanwhile, the announcement came as Congress was discussing an agreement to end a federal government shutdown that had lasted more than 40 days. During the shutdown, many staff at key agencies, including the IRS and SEC, were temporarily furloughed.