The U.S. Securities and Exchange Commission (SEC) announced a delay in reviewing Bitwise's proposal to include staking in its Ethereum ETF.
SEC Delay Reasons
On June 30, the SEC announced it would extend its review of Bitwise's staking proposal in its Ethereum ETF. This decision might change the landscape of crypto investments, but regulators are seeking public feedback on potential risks associated with staking.
Regulators' Risks and Concerns
The SEC expresses concerns about how staking mechanisms fit into traditional financial structures. Key issues include:
- Notifications of potential penalties ('slashing') for validators, - Liquidity problems with staked ETH, - Validator centralization and related risks.
Bitwise's Response and Staking Future
Bitwise argues that the risks associated with staking are manageable, comparing staking rewards to dividends in traditional ETFs. However, the SEC's request for public comments underscores ongoing regulatory concerns, especially following recent actions against some staking programs.
The SEC's decision to extend its review of Bitwise's staking proposal emphasizes the need to assess new types of investments within traditional financial tools.
