- Hong Kong’s SFC now allows licensed platforms to offer crypto staking, requiring written approval and strict asset safeguards.
- New SFC rules mandate full disclosure of staking risks and the use of licensed custodians to enhance investor protection.
- As part of ASPIRe, Hong Kong expands regulated crypto services, reinforcing its position as a digital asset hub in Asia.
The Hong Kong Securities and Futures Commission (SFC) has officially licensed virtual asset trading platforms (VATPs) to offer clients access to crypto staking services. On April 7, the commission issued a statement through an official circular detailing regulatory conditions for offering these services.
The SFC requires licensed VATPs to obtain written approval before launching staking options. However, these platforms must retain control over the withdrawal mechanisms and implement safeguards to ensure asset security. According to the SFC, these measures seek to lower investors’ risks and promote greater transparency surrounding staking activities.
Regulatory Measures to Protect Investors and Assets
To function under this framework, platforms must fully disclose potential slashing penalties, lock-up periods, and technical vulnerabilities like hacking or system downtime. Further, staking activities should only be conducted through a licensed or authorized institution.
Moreover, the SFC has asked platforms to establish internal controls to prevent errors and risks. These controls should guarantee proper asset custody and clear communication of all terms to clients participating in staking. In addition, virtual assets staked must be held in a secure manner to protect investors’ holdings.
This Crypto Expansion is Included in ASPIRe’s Roadmap
The staking guidelines are part of the SFC’s broader “ASPIRe” roadmap, which focuses on expanding Hong Kong regulated virtual asset ecosystem. The product development pillar enables platforms to expand their product line in a regulated manner under staking.
In support of staking, the SFC updated its circular for SFC-authorised virtual asset funds (VA Funds). These funds must also be approved before staking activities and are limited to working with licensed VATPs and authorized custodians. Moreover, a cap has been introduced to help manage the liquidity risk of staking.
SFC Emphasises Security and Compliance in New Staking Framework
The SFC also stressed that a secure and compliant environment is essential to virtual asset growth. Under the right conditions, such as the availability of more services, SFC Chief Executive Officer Julia Leung said, services should be available, with strict client asset protection and transparency measures.
The regulatory update follows other significant steps in Hong Kong’s drive to become Asia’s top digital asset hub. The city became the first in the region to approve spot exchange-traded funds (ETFs) to trade Bitcoin and Ethereum, which was a significant step in developing a crypto policy.
