Morgan Stanley maps out crypto staking options for financial advisors

Morgan Stanley is shifting its advisor-facing crypto discussion from whether clients should hold digital assets to where those assets should be staked. In a newsletter directed at financial advisors, John Keller of Morgan Stanley Investment Management compared three staking routes: exchange-traded products (ETPs), centralized exchanges, and self-custody wallets. His central argument is that the chosen venue determines how much of the staking reward an investor actually keeps, with ownership structure, liquidity, exposure to slashing risk and reward share all differing across the three routes.

Slashing, which can penalize funds staked through a validator that breaks network rules or malfunctions, was the focus of the newsletter's "Ask an Expert" segment. Waseem Salim, CEO of Valdora, laid out due diligence practices intended to help protect clients from validator penalties.

The comparison coincides with the launch of two staking-enabled products. On July 28, 2026, Morgan Stanley launched the Morgan Stanley Ethereum Trust (MSSE) and the Morgan Stanley Solana Trust (MSOL). According to the research findings on the products, the Ethereum trust is designed to stake between 50% and 80% of its ETH holdings, while the Solana trust can stake up to 100% of its SOL. Both are set to pass approximately 95% of gross staking rewards to shareholders after provider fees are deducted. The trusts carry a 0.14% sponsor fee, and Morgan Stanley, per the same findings, retains none of the staking income. The article suggests the partial staking target on the Ethereum trust may reflect a trade-off between yield and liquidity, since staked tokens can take time to unlock while redemptions must still be met. Morgan Stanley's broader crypto product lineup has assets under management exceeding $14 billion across its suite, according to the research findings.

For advisors, the ETP format offers staking exposure without requiring clients to hold tokens directly or manage validators, wrapping the activity in a brokerage structure clients already use. The trade-off is reliance on the fund's choice of staking providers. Slashing, liquidity constraints and network-level issues remain beneath the wrapper. The key figure for advisors to evaluate is the gap between gross and net rewards, with the roughly 95% pass-through and 0.14% fee providing a concrete benchmark.