The IRS has provided a safe harbor for certain exchange-traded digital asset trusts. Under Rev. Proc. 2026-20, qualifying trusts that hold cash and one type of digital asset on a permissionless proof-of-stake network can earn staking rewards without jeopardizing their status as investment trusts or grantor trusts for federal tax purposes. The safe harbor includes requirements for custodians, staking providers, liquidity management and reward distributions. Existing trusts have six months after Oct. 6, 2026, to comply. For investors, the guidance provides clearer rules for how qualifying trusts can earn and distribute staking rewards. Contact us with questions.
