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24/05/24
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SFC of Hong Kong Reportedly Considering Permitting Staking Option for Spot ETH ETFs
It has been reported that the Securities and Futures Commission (SFC) of Hong Kong is considering the inclusion of provision of Ether (ETH) staking in the spot ETH ETFs approved in recent times.
Bloomberg’s report noted that the SFC is considering whether to allow ETH ETF issuers in the country to stake ETH for passive income. The SFC officially approved several spot BTC and ETH ETFs in the region last month, including ChinaAMC, Harvest, and Bosera HashKey BTC and ETH ETFs.
According to the report, the regulator discussed with the country’s crypto ETF issuers regarding the provision of staking services through licensed platforms following fielding proposals in recent times. However, there is currently no established timeline to implement the matter.
It is against the U.S. SEC’s policy which considers staking services as an investment contract and a violation of securities laws. The amended 19b-4 filing by issuers proposing the listing and trading of spot ETH ETFs over the past few days did not include staking. Fidelity did not include staking in its latest S1 filing.
Cryptocurrency staking involves locking crypto tokens for some time to earn a percentage of staked tokens as a reward. In 2023, the U.S. SEC considered staking services as a security, compelling entities that were providing staking services to shut down their services in the U.S.
Coinbase is still engaged in a legal tussle with the U.S. SEC regarding its stance on staking, noting that core staking is not a security, as investment of money is uninvolved, and the opportunity cost of staking is not an investment.
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