Hong Kong and US Take Major Steps Toward Ethereum Staking Integration

The global race to integrate staking into regulated cryptocurrency investment products is heating up. On one front, HashKey has become one of the first exchanges in Hong Kong to receive regulatory approval to offer Ether (ETH) staking services, a move that could transform how institutions engage with proof-of-stake assets. 

Meanwhile, in the United States, Bloomberg Intelligence analyst James Seyffart suggests that staking may soon be permitted for Ether ETFs, potentially as early as May, following the SEC’s recent approval of options contracts tied to spot ETH funds.

HashKey Secures Regulatory Greenlight for Staking Services in Hong Kong, Paving the Way for ETH ETF Yield Strategies

Hong Kong-based exchange HashKey has received regulatory approval to offer staking services, marking a critical leap forward for investors seeking passive yield opportunities from digital assets such as Ether (ETH).

The Hong Kong Securities and Futures Commission (SFC) granted approval on April 10, following new regulatory guidance on staking services for Licensed Virtual Asset Trading Platforms (VATPs) and authorized funds. HashKey made the announcement via social media, emphasizing its new role as “one of the first regulated Hong Kong exchanges” to provide such offerings.

This development comes at a pivotal time, as institutional interest in crypto products continues to evolve from pure exposure vehicles to more advanced, yield-generating strategies. 

By introducing regulated staking options, Hong Kong becomes the first major financial jurisdiction to offer spot Ether ETFs with integrated staking opportunities.

The SFC’s approval was bolstered by support from the China Securities Regulatory Commission (CSRC), which recognized the broader implications of crypto staking for blockchain security and investor participation. According to a translated version of an announcement posted by PANews, the CSRC sees staking as a mechanism that “enhances the security of blockchain networks and allows investors to earn returns from virtual assets in a regulated market environment.”

This marks a notable evolution in the regulatory perception of staking, particularly in a region often viewed as cautious about digital assets. The endorsement from both the SFC and CSRC not only signals regulatory clarity but also an intent to position Hong Kong as a hub for compliant and sophisticated crypto investment vehicles.

Spot Ether ETF Staking: The Institutional Catalyst

With this new approval, HashKey is set to lead the charge in bridging spot Ether ETFs and staking—a combination that has yet to materialize in more restrictive markets like the United States.

“In the near future, investors will not only be able to hold Ether ETFs to obtain staking income but also directly hold ETH and obtain additional income through our staking services,” said Terence Pu, Managing Director at HashKey, in a translated statement. 

Pu hinted at a dual-access model, where ETF investors and direct holders alike can participate in network validation while earning yield.

Hong Kong approved its first spot Bitcoin and Ether ETFs in April 2024. These ETFs are structured around in-kind subscription models, enabling direct interaction with the underlying assets—a crucial factor in allowing for integrated staking mechanisms.

With Asia, and specifically Hong Kong, now rolling out these services in a regulated environment, pressure may mount on US policymakers to keep pace or risk ceding institutional capital to more progressive markets.

The staking approval also aligns with HashKey Capital’s broader thesis. The firm has recently emphasized its bullish stance on DePIN (Decentralized Physical Infrastructure Networks) and Real World Assets (RWAs), both of which rely on staking and tokenized yield models to incentivize network participants.

Staking Services for US Ether ETFs May Launch by May, Bloomberg Analyst Says

In related news, Ether-based exchange-traded funds (ETFs) in the United States could soon offer staking rewards to investors as well, according to Bloomberg Intelligence analyst James Seyffart, potentially unlocking a critical revenue stream for institutional holders of Ethereum (ETH) and marking a watershed moment in the evolution of regulated crypto investment products.

Following the US Securities and Exchange Commission’s (SEC) April 9 decision to authorize options trading on spot Ether ETFs, Seyffart believes staking approval could follow as soon as May, though he cautions that final approval may take until the end of October 2025.

“It's possible they could be approved for staking early, but the final deadline is at the end of October,” Seyffart posted on X. “Potential intermediate deadlines before the final approval (or denial) are in late May & late August.”

A Turning Point for Ether ETF Utility

Ether ETFs were officially launched in June 2024, following the SEC's approval of spot Bitcoin ETFs earlier that year. However, while Bitcoin products gained widespread traction, Ethereum funds have lagged in adoption, largely due to the absence of staking yields—a core value proposition of Ethereum’s proof-of-stake (PoS) architecture.

According to Farside Investors, Ether ETFs have brought in $2.4 billion in net inflows as of April 10, a fraction of the $35 billion seen by their Bitcoin counterparts.

Ethereum ETF flows (Source: Farside Investors)

This underperformance has been a cause of concern among fund managers, who argue that staking is a crucial mechanism for unlocking Ethereum’s full investment potential. 

In March, BlackRock’s head of digital assets, Robbie Mitchnick, publicly stated that Ether ETFs are “less perfect” without staking, adding, “A staking yield is a meaningful part of how you can generate investment return in this space.”

Staking, a process native to Ethereum’s proof-of-stake consensus mechanism, involves locking up ETH to help validate network transactions. In return, participants earn staking rewards, creating an opportunity for passive income akin to earning interest in traditional finance.

Allowing ETFs to participate in staking would enable funds to generate yield directly from the underlying ETH, boosting total returns for institutional and retail investors alike.

In contrast, options contracts, which the SEC has now approved for Ether ETFs, give investors the right—but not the obligation—to buy or sell shares at specific prices within set timeframes. While options increase flexibility and allow for advanced trading strategies like hedging and speculation, they do not generate passive returns like staking.

Regulatory Momentum Builds

The approval of Bitcoin ETF options in September 2024 and now Ether ETF options in April 2025 represents a clear evolution in the SEC’s stance on crypto investment products. 

Analysts and fund managers alike see these developments as stepping stones toward broader functionalities, including in-kind redemptions and staking.

Asset managers have been actively lobbying the SEC for more comprehensive permissions. Requests to permit in-kind creations and redemptions, which would allow ETF issuers to swap crypto assets directly rather than converting them to cash, are still pending.

If staking is approved, it would signal the most transformative leap yet for Ether ETFs. As Bitwise Invest’s head of alpha strategies Jeff Park noted in a prior post, the development of ETF options and staking mechanisms represents a “monumental advancement” that creates “extremely compelling opportunities” for investors.

Outlook and Industry Reactions

With Seyffart’s timeline suggesting possible regulatory clarity as soon as late May, ETF issuers like BlackRock, Bitwise, and Fidelity are preparing for a pivotal moment. The ability to add staking to their Ether products could catalyze a second wave of ETF adoption, especially among yield-hungry institutions.

If approved, staking would provide a dual benefit for Ether ETF holders: price exposure to ETH and passive yield through staking rewards, making the investment product more competitive with decentralized staking platforms and more appealing than their Bitcoin counterparts, which do not offer staking opportunities.