- Hong Kong’s SFC mandates full asset control for licensed crypto staking platforms.
- Staking services in Hong Kong must disclose risks like hacking and validator downtime.
- Hong Kong’s crypto market could exceed $700B by 2025, surpassing Japan’s.
The Securities and Futures Commission (SFC) of Hong Kong introduced new guidance on April 07, allowing virtual asset trading platforms (VATPs) and authorized funds to provide staking services. The latest ruling establishes Hong Kong as a forward-thinking center for cryptocurrency operations across Asia-Pacific.
The SFC has established rules that require platforms to get approval before starting their new services while striving to maintain innovation and investment protection measures. The regulator’s move follows its “ASPIRe” roadmap, unveiled in February, which seeks to expand the city’s digital asset ecosystem.
Investors who participate in staking by locking their crypto assets to maintain blockchain operations must now comply with strict supervision. Julia Leung, SFC’s Chief Executive Officer, stressed that the market sustainability of Hong Kong’s virtual assets depends on regulated expansion.
Strict Rules Govern Staking Operations
According to the SFC regulation, VATPs must retain complete authority regarding customer funds while banning third-party outsourcing from staking operations. Platforms need to provide open information about potential risks, which include hacking incidents, blockchain errors, and validator downtime events. Companies operating in the SFC must present complete information about fees and lock-up durations and plans for managing operational interruptions.
These regulations guarantee investor protection within the framework of system-wide trust establishment. Authorized virtual asset funds face similar requirements. They can only stake through licensed platforms or institutions, with a cap imposed to manage liquidity risks.
The cautious approach contrasts with Singapore, which retained an absolute prohibition against retail staking in 2023, while the U.S. Securities and Exchange Commission has developed strict limitations. Hong Kong established a regulatory framework that promotes business development through careful measures to preserve safety standards.
A Step Toward Crypto Leadership
Hong Kong’s regulatory choice occurs during an intensified competition period in international cryptocurrency markets. Retail trading on licensed crypto exchanges became possible in the city after implementing its licensing program in June 2023. Through Bitcoin and Ethereum, spot ETFs became the first in Asia to establish digital asset exposure and strengthen its digital market position.
The research conducted by State Street indicates this market segment will reach $700 billion by 2025, becoming bigger than Japan’s digital asset market. SFC Executive Director Christina Choi emphasized the security value and financial transformation aspects of staking at the Hong Kong Web3 Festival 2025. She remarked on how technology evolves quickly and showed similarities to the development of previous advancements, including the floppy disk.
Meanwhile, the SFC moved against fraudulent crypto schemes as officials clarified they would investigate the fraudulent “KONG” meme coin activity on X. Hong Kong exhibits its leadership goals for cryptocurrency and its commitment to enforcing order in its regulatory approach.