Hong
Kong’s
Securities
and
Futures
Commission
(SFC)
is
reportedly
considering
allowing
Ethereum
ETFs
under
its
jurisdiction
to
stake
their
tokens,
a
stance
notably
different
from
that
of
US
regulators.
Staking
involves
participants
locking
up
digital
assets
to
support
network
security
and
operations,
earning
rewards
in
return. Its
introduction
into
the
ETFs
would
explore
the
income-generating
potential
of
staking
within
the
framework
of
a
regulated
financial
product.
Market
observers
note
that
this
initiative
aligns
with
the
SFC’s
progressive
approach
following
its
recent
approval
of
spot
Ethereum
ETFs
alongside
Bitcoin
products.
Moreover,
the
staking
feature
could
potentially
attract
more
investors
to
Hong
Kong’s
Ethereum
ETFs,
which
have
struggled
with
low
trading
volumes
since
their
launch.
According
to
SosoValue,
as
of
May
22,
the
total
ETH
in
these
funds
was
13,380,
while
the
total
BTC
was
3,690.
Staking
in
the
US
While
Hong
Kong
regulators
are
contemplating
a
more
favorable
stance
toward
staking,
the
US
Securities
and
Exchange
Commission
(SEC)
has
argued
that
the
mechanism
could
fall
under
federal
securities
law.
Over
the
past
year,
the
SEC
has
taken
legal
action
against
major
crypto
firms
like
Kraken
and
Coinbase,
claiming
their
staking
products
violate
federal
securities
laws.
However,
crypto
stakeholders
have
strongly
opposed
this
classification.
Against
this
backdrop
and regulatory
uncertainty,
several
Ethereum
ETF
applicants,
including
Fidelity,
BlackRock,
Grayscale,
Bitwise,
VanEck,
Franklin
Templeton,
Invesco
Galaxy,
and
ARK
21Shares,
have
excluded
staking
from
their
fund
plans.
This
development
has
prompted
some
market
participants
to
argue
that
these
funds
might
be
less
attractive
to
investors
without
staking.
The
SEC
is
expected
to
reveal
its
decision
about
the
pending
Ethereum
ETF
applications
today,
May
23.
This
week,
the
market
consensus
turned
positive
after
Bloomberg
analyst
Eric
Balchunas
raised
the
odds
of
approval
to
75%,
citing
the
increasing
political
pressure
surrounding
the
financial
regulator.
Notably,
the
chances
of
approval
have
also
spiked
to
65%
from
a
low
of
10%
on
Polymarket.
Mentioned
in
this
article
Go to Source
Author: Oluwapelumi Adejumo
