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 USWhile 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.Oluwapelumi values Bitcoin’s potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.Also known as “Akiba,” Liam is a reporter, editor and podcast producer at CryptoSlate. He believes that decentralized technology has the potential to make widespread positive change. Essential crypto updates and analyses. Straight to your inbox, every day.The Decentralized Fund inititaive is designed to support Polkadot-focused organizations with funding.US approval of Ethereum ETFs turned investors’ sentiment in ETH positively.Hong Kong’s financial regulator SFC has licensed only 2 crypto exchanges in the region.SEC’s regulatory crackdown influenced ETF issuers to exclude staking from proposals amid compliance concerns.The S-1 filing follows the SEC’s approval of NYSE Arca’s proposed rule change on behalf of ProShares.All spot ETH ETFs have yet to launch despite recent developments.ICBC compared Bitcoin to gold and said Ethereum has established itself as “digital oil” capable of powering myriad applications across the web3 ecosystem.DeFillama data shows the platform’s TVL rose 135% despite the attack.CryptoSlate’s latest market report dives deep into the effects corporate Bitcoin purchases have on the market.Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.
