top of page

Hong Kong SFC Considers Ether Staking for ETH ETF Issuers

The consideration of Ether staking for ETH ETF issuers by Hong Kong’s SFC marks a significant step towards enhancing the region's crypto market.


The consideration of Ether staking for ETH ETF issuers by Hong Kong’s SFC marks a significant step towards enhancing the region's crypto market.
Credit: Foretoken Media

VICTORIA CITY — Hong Kong’s Securities and Futures Commission (SFC) is reportedly considering an Ether staking option for spot ETH exchange-traded fund (ETF) issuers. According to Bloomberg, the SFC is evaluating whether ETH ETF issuers in Hong Kong should be permitted to stake Ether (ETH) and earn passive income.


Potential Boost for Hong Kong’s Crypto Market


Hong Kong’s financial regulator has engaged in discussions with the country’s crypto ETF issuers about offering staking services through licensed platforms. These conversations come after recent proposals were submitted. The SFC is currently in the exploratory phase, with no fixed timeline for implementation.


This move by the SFC stands in contrast to the policy adopted by the U.S. Securities and Exchange Commission (SEC), which views staking services as an investment contract, thereby violating securities laws. This perspective was reinforced by recent amendments from major financial institutions applying for the spot ETH ETF, such as Fidelity removing staking from their latest S1 filing.


SEC’s Stance on Staking Services


Last year, the U.S. SEC classified staking services as securities, compelling platforms like Kraken exchange to shut down their staking services in the U.S.


However, Coinbase is challenging the SEC’s stance, arguing that core staking is not a security because it does not involve an investment of money. On March 20, Coinbase published a “Petition for Rulemaking,” emphasizing that the opportunity cost of staking is not an investment.


Hong Kong: A Growing Hub for Crypto Service Providers


In 2024, Hong Kong has emerged as a burgeoning hub for crypto service providers, thanks to several pro-crypto regulations.


The country became the first to approve a spot ETH ETF, ahead of the U.S., although the response has been lukewarm since its launch last month. The potential decision to allow staking could attract new investments into Hong Kong’s ETFs.

Comments


bottom of page