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ARTICLE · 03 NOVEMBER 2026

IRS Refines Safe Harbor For Exchange-traded Trusts That Stake Digital Assets

McDermott Will & Schulte
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On October 6, 2026, the Internal Revenue Service (IRS) released Revenue Procedure 2026-20, which clarifies, modifies, and supersedes Revenue Procedure 2025-31.

United StatesTechnology
John T. Lutz
John T. Lutz
William R. Pomierski
William R. Pomierski
Andrew Granek
Andrew Granek
Jeremy Kass
Jeremy Kass
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Overview

On October 6, 2026, the Internal Revenue Service (IRS) released Revenue Procedure 2026-20, which clarifies, modifies, and supersedes Revenue Procedure 2025-31. Revenue Procedure 2025-31 provided a safe harbor under which certain trusts that qualify as investment trusts under Treasury Regulation § 301.7701-4(c) and as grantor trusts may stake their digital assets without jeopardizing that tax status. Revenue Procedure 2026-20 responds to requests for additional clarity on the original safe harbor and gives trusts six months after October 6, 2026, to implement its requirements.

This article summarizes the key changes and their implications for sponsors, trustees, and custodians of digital asset exchange-traded products (ETPs).

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