Morgan Stanley has moved a step closer to launching its own staking-enabled spot Ethereum ETF, filing an amended registration statement that undercuts rivals on both its management fee and the slice of staking rewards it keeps.
The filing, an amended Form S-1 submitted June 18, 2026, registers the Morgan Stanley Ethereum Trust, which would trade on NYSE Arca under the ticker MSSE. As a preliminary prospectus, it is not yet effective, and the fund cannot launch until the registration clears the SEC.
Inside the Filing
The trust would hold ether and track the CoinDesk Ether Benchmark, with Morgan Stanley Investment Management serving as sponsor. It carries a unitary sponsor fee of 0.14%, out of which Morgan Stanley covers nearly all operating costs; the same fee it charges on its Bitcoin ETF, MSBT. That undercuts the 0.25% standard fee on BlackRock’s iShares staked Ethereum product, though BlackRock’s promotional first-year waiver currently runs lower at 0.12%.
Custody would sit with the Bank of New York Mellon and Coinbase Custody, with Coinbase also acting as the prime broker. The authorized participants, i.e. the firms that create and redeem shares, include Virtu, Jane Street, Macquarie, and Goldman Sachs. At the June 16 benchmark, Ether (ETH) was priced near $1,794, leaving the second-largest crypto asset well below the $2,000 level as Morgan Stanley files to enter the market.
How the Staking Works
The defining feature is staking. Under normal conditions, the trust intends to stake 50–80% of its ether to earn on-chain rewards, executed through three third-party providers, Figment, Galaxy, and Coinbase (via Coinbase Canada), while the custodians retain control of the private keys. Staked ether is exposed to “slashing,” the protocol’s penalty for validator misconduct, and to unbonding delays that can lock assets for days or longer, a liquidity risk the filing manages by keeping a portion of the ether unstaked.
The economics favor shareholders more than the market leader’s. Providers and custodians take an aggregate 5% of staking rewards, with the trust keeping the remaining 95% and Morgan Stanley taking none for itself. By contrast, BlackRock’s staked Ethereum ETF keeps 18% of gross staking rewards, passing 82% to holders. Net rewards are distributed to shareholders monthly, at least quarterly, in cash — the trust sells ether to fund the payout.
A Full Crypto Lineup
The Ether filing rounds out a fast-expanding Morgan Stanley crypto franchise. The bank already runs MSBT, a spot Bitcoin ETF that launched in April and drew clean inflows on the strength of its low fee, and it has a Solana ETF, MSOL, pending with a detailed staking plan. Beyond ETFs, Morgan Stanley has begun rolling out direct crypto trading on its E*Trade platform, offering Bitcoin, Ether, and Solana to retail clients. In a little over a year, the firm has shifted from merely offering rival issuers’ funds to its wealth clients to building its own end-to-end crypto product stack.
The Staking-ETF Race
Morgan Stanley is entering a category that barely existed a year ago. Staking was effectively off-limits for U.S. spot Ether ETFs until a shift in SEC posture under Chair Paul Atkins reversed the prior stance, opening the door to yield-bearing structures. BlackRock launched its staked Ether ETF in March, following earlier entrants from Grayscale and REX-Osprey, and the competition has since centered on fees and how much staking yield issuers pass through.
The timing is pointed. Morgan Stanley is filing to expand its Ether exposure at a moment when ETH is trading near multi-year lows and U.S. spot Ether ETFs have only recently snapped a long outflow streak, a sign the firm is positioning for the long term rather than chasing momentum. With its low fee and shareholder-friendly staking split, the pitch is clear: cheaper access to ether, plus more of the staking yield. Whether that wins flows from BlackRock’s entrenched lead will depend on approval first — and the filing makes no promises on timing.
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