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Hong Kong’s Securities and Futures Commission (SFC) is reportedly considering the possibility of allowing Ethereum ETFs under its jurisdiction to stake the token, a move that differs from the position taken by U.S. regulators.
This plan is consistent with the progressive approach of the SFC, which recently approved a spot Ethereum ETF along with a Bitcoin product. Reports say talks are still ongoing and no clear timeline for a decision has been provided.
Staking on Ethereum allows participants to lock up their Ether (ETH) holdings to support network security and operations in exchange for receiving rewards. This process involves depositing at least 32 ETH to activate the verification software. This allows users to directly participate in the Ethereum consensus by validating transactions, creating new blocks, and monitoring malicious activity. Other types of staking allow participants with less than 32 ETH to pool their funds (staking pool), and some platforms offer staking as a service.
The introduction of staking has the potential to attract more investors to Hong Kong’s Ethereum ETF, which has suffered from low trading volumes since launch. According to aggregated data, the fund’s total ETH is 13,380 and its total BTC is 3,690.
In contrast, the U.S. Securities and Exchange Commission (SEC) has taken legal action against major cryptocurrency companies such as Kraken and Coinbase over their staking products, arguing that staking could fall under federal securities laws. . This stance was met with strong opposition from cryptocurrency stakeholders.
Considering regulatory uncertainty in the US, several Ethereum ETF applicants, including Fidelity, BlackRock, Grayscale, Bitwise, VanEck, Franklin Templeton, Invesco Galaxy, and ARK 21Shares, have excluded staking from their fund plans. Some market participants argue that the decision could make the fund less attractive to investors.
The SEC is expected to announce its decision on the pending Ethereum ETF application on Thursday, May 23. Market sentiment has turned positive this week, with Bloomberg analyst Eric Balchunas raising the odds of approval to 75%, citing increasing political pressure on financial regulators. Likewise, the likelihood of approval skyrocketed from a low of 10% to 65% on Polymarket.
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