Securities Regulation Daily Wrap Up, BLOCKCHAIN—IRS and Treasury issue safe harbor allowing crypto ETP trusts to stake digital assets without losing tax status, (Nov 12, 2025)
New IRS guidance permits qualifying investment and grantor trusts to stake digital assets under defined conditions while preserving their tax treatment.
The IRS issued Revenue Procedure 2025-31, creating a safe harbor for investment and grantor trusts that allows them to stake digital assets without jeopardizing their federal tax classification. The guidance clarifies that trusts meeting certain requirements under Treasury Regulation §301.7701-4(c) may participate in staking through custodial arrangements and still qualify as investment and grantor trusts. Existing trusts also have a nine-month window, beginning November 10, 2025, to amend their governing instruments to comply with the safe harbor and maintain their favorable tax status.
The new framework defines how staking activities must be structured to remain within regulatory boundaries. Trusts must hold only one type of digital asset, trade on a national securities exchange, and work through custodians who control all staking transactions on their behalf. Additional safeguards, such as indemnification from slashing, strict limits on trust activities, and compliance with SEC rules, ensure that staking serves to protect trust property and maintain the passive investment character required for trust classification.
Treasury Secretary Scott Bessent praised the measure as a step forward for both innovation and investor protection, stating on X that the guidance “gives crypto exchange-traded products a clear path to stake digital assets and share staking rewards with their retail investors.” Bessent added, “This move increases investor benefits, boosts innovation, and keeps America the global leader in digital asset and blockchain technology.” The guidance takes effect for tax years ending on or after November 10, 2025.
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