VanEck Withdraws stETH ETF Application Amid Regulatory Shifts and Competition
MissedBlock Desk · · 3 min read
Updated
VanEck has withdrawn its application for the VanEck Lido Staked Ethereum ETF, approximately one year after its initial filing. The withdrawal, filed on October 14, 2026, was not attributed to direct regulatory prohibition but rather to significant shifts in the regulatory landscape and the competitive market for Ethereum staking products. Recent regulatory clarity has enabled competing ETFs to offer direct ETH staking capabilities, diminishing the intermediary value of liquid staking tokens (LSTs) like stETH.
Why This Matters
The materials describe a narrow update: VanEck withdrew its application for the VanEck Lido Staked Ethereum ETF, which was filed a year prior. The specific reasons for VanEck’s withdrawal of the stETH ETF application.
Broader Context
Source materials place the factual news in this context: VanEck withdrew its Lido stETH ETF application filed a year ago.
Regulatory Landscape Evolution
The SEC’s stance on staking has evolved, with statements in May 2025 indicating that Proof-of-Stake (PoS) staking is not considered a securities transaction. Further clarification came in August 2025 from the SEC’s Division of Corporation Finance, which stated that liquid staking in an administrative capacity is also not a securities transaction. This evolving regulatory environment paved the way for ETFs that can natively stake ETH.
Competitive Market Shift
This development has intensified the competitive landscape. For instance, BlackRock’s iShares Staked Ethereum Trust ETF (ETHB), which launched on March 12, 2026, offers native ETH staking. ETHB has a base fee of 0.25% annually, with a temporary reduction to 0.12% for the first $2.5 billion in assets. The ability of these ETFs to stake ETH directly reduces the need for intermediary products like VanEck’s proposed stETH ETF.
Impact on Lido
The withdrawal of VanEck’s application and the rise of native staking ETFs have had a notable impact on Lido, a prominent liquid staking protocol. Lido’s Total Value Locked (TVL) has reportedly decreased by approximately 40% since the initial ETF application was filed. At the time of VanEck’s original S-1 filing on October 16, 2025, Lido’s TVL was nearly $40 billion. The diminished intermediary value of Lido in the context of traditional finance products like ETFs is a direct consequence of these market and regulatory shifts.
Further complicating the environment for staking protocols, MetaMask revealed a security incident on its staking infrastructure on September 30, 2025. As a precautionary measure, MetaMask began withdrawing approximately 17,000 validators from Lido on October 1, 2025. This incident contributed to a new high for Ethereum’s unstaking queue, lasting for about a year.
VanEck itself has demonstrated a cautious approach to staking within ETFs. On May 17, 2026, VanEck, along with Grayscale, updated their BNB ETF applications to remove staking functionality. VanEck’s VBNB ETF subsequently launched on May 28, 2026, without staking capabilities.
In March 2026, the SEC and CFTC released a joint explanatory release detailing the classification of 16 major cryptocurrencies as digital commodities, providing a safe harbor for staking. More recently, on September 30, 2026, the SEC published a crypto FAQ that further defined the boundaries of staking derivative tokens as securities.
Future Outlook
The withdrawal of the stETH ETF application by VanEck underscores a significant shift in how liquid staking tokens are perceived within traditional finance. As regulatory clarity allows for direct staking in ETFs, the unique value proposition of LSTs as intermediaries is being re-evaluated, potentially redirecting their focus towards on-chain activities and DeFi applications.