11

November

2025

IRS creates safe harbor for crypto ETF staking

On November 10, 2025, the Internal Revenue Service (IRS) issued Revenue Procedure 2025-31, establishing a safe harbor for publicly traded digital asset trusts and exchange traded funds (ETFs) that participate in crypto staking. The safe harbor confirms that eligible investment trusts and ETFs do not lose their tax classification when they stake the underlying digital asset. To qualify, the trust or ETF must be registered with the SEC, hold a single-asset portfolio, and use a custodian or staking agent to perform all staking-related functions. The Revenue Procedure treats staking rewards as additional units of the same asset held by a trust, preserving grantor trust treatment under the Internal Revenue Code.

The IRS gives existing trusts and ETFs 9 months to amend their governing agreements to rely on the safe harbor. The guidance reduces uncertainty for institutional products seeking to participate in protocol staking while maintaining investment trust status. It also sets clear boundaries on permissible activity by limiting the safe harbor to publicly traded single-asset trusts and ETFs and by requiring intermediated staking. Trusts and ETFs that do not meet these requirements could continue to face complex tax analysis and a greater risk of reclassification.

Last Updated 11/11/2025.


United States (Regulatory)

History:

  • Nov. 10, 2025: The IRS issues Revenue Procedure 2025-31, creating a safe harbor allowing eligible investment trusts to stake digital assets without losing their tax classification. Revenue Procedure 2025-31.
See the Revenue Procedure
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Tom Momberg

+17186645458 tom.momberg@dlxlaw.com

Tom advises clients in an array of matters related to blockchain technology, decentralized finance, banking and payments systems, financial products, and financial technology applications. He joined DLx Law as an attorney after working as in-house counsel for a payments and banking software service provider, advising on various legal and regulatory matters, operations, risk, customer due diligence, and corporate best practices.

Tom received his J.D. from George Mason University Law School in Virginia and his B.A. from the University of Wisconsin-Milwaukee. Tom is a former journalist, and, while in law school, he interned for DLx Law and served as a law clerk for several federal institutions in Washington, D.C., including the CFTC, FCC, and House Judiciary Committee. Tom is admitted to practice law in the District of Columbia and the State of Oregon.

Angela Angelovska-Wilson

+12023651448 angela@dlxlaw.com

Angela is an early distributed ledger technology adopter and a leading authority in the evolving global legal and regulatory landscape surrounding distributed ledger technology and smart contracts. Prior to co-founding DLx Law, Angela served as the Chief Legal & Compliance Officer of Digital Asset and was part of the founding team.

Prior to joining Digital Asset, Angela was a partner at Reed Smith where she regularly advised clients on the implementation of new technologies to finance and the complex regulatory schemes involved in the development, creation, marketing, sale and servicing of various financial services and products. Before Reed Smith, Angela spent most of her career in various roles at Latham & Watkins, where she was recognized by The Legal 500 US among the top finance attorneys in the U.S.

Angela has a deep understanding of the Fin-Tech industry and in particular the distributed ledger industry, having been involved in a number of startups in various roles, as an employee, entrepreneur and advisor. In addition to DLx Law, Angela is also co-founder of Sila Inc., an innovative technology company.