10 hours ago
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TLDR
- Hong Kong’s SFC now allows licensed crypto platforms to offer staking services
- Platforms must maintain control of client assets and fully disclose all risks
- Prior written approval from the SFC is required before offering staking services
- This move contrasts with Singapore’s retail staking ban and the SEC’s restrictive approach
- The change aligns with Hong Kong’s “ASPIRe” roadmap to grow its digital asset ecosystem
Hong Kong’s Securities and Futures Commission (SFC) has officially permitted licensed virtual asset trading platforms (VATPs) and authorized funds to offer crypto staking services. This regulatory move, announced on April 7, 2025, marks a clear effort by Hong Kong to position itself as a crypto-friendly financial hub in Asia.
Under the new guidelines, crypto firms holding VATP licenses can now provide staking services to customers. Staking allows crypto holders to earn passive income by “locking up” their digital assets for a period of time.
Julia Leung, the SFC’s Chief Executive Officer, emphasized the importance of this development. “Broadening the suite of regulated services and products is crucial to sustain the healthy advancement of Hong Kong’s virtual asset ecosystem,” she said.
The regulator has implemented specific safeguards to protect investors. Licensed platforms must maintain complete control of clients’ assets throughout the staking process.
Outsourcing staking to third parties is explicitly prohibited. This requirement aims to prevent scenarios where client funds might be at risk due to external provider failures.
Investor Protection Measures
Transparency is central to the new framework. Platforms offering staking services must clearly disclose all associated risks to customers.
These risks include potential blockchain errors, hacking vulnerabilities, and validator inactivity issues. VATPs must also inform clients about the staking process, fee structures, and minimum lock-up periods.
Business continuity plans during disruptions must be clearly communicated. This ensures customers understand what happens to their assets if the platform experiences technical issues.
For authorized virtual asset funds, the rules are equally strict. They can only stake through licensed platforms or authorized institutions.
Funds face an enforced cap on staking activities to manage liquidity risks. This prevents situations where too many assets are locked up, potentially affecting fund redemptions.
Regional Competitive Advantage
Hong Kong’s approach stands in sharp contrast to its regional rival Singapore. The latter banned retail staking in 2023, citing investor protection concerns.
The United States has taken a similar restrictive stance. The Securities and Exchange Commission continues to limit staking through enforcement actions.
However, pressure is mounting on the SEC to reconsider its position. A bipartisan group of senators has called for a more accommodating approach to staking services.
Several U.S. states, including Illinois, have recently dropped staking lawsuits against Coinbase. These legal challenges first emerged in 2023.
The SFC’s decision aligns with Hong Kong’s broader strategy to develop its digital asset sector. The move is part of the city’s “ASPIRe” roadmap for growing the virtual asset ecosystem.
Before offering staking services, platforms must receive formal approval from the SFC. This approval comes with specific license conditions tailored to each provider.
Hong Kong has been criticized for its slow-moving licensing process compared to other Asian countries. Today’s announcement may help address these concerns.
During the Hong Kong Web3 Festival 2025, government officials revealed plans to launch stablecoin legislation. They also announced upcoming licenses for over-the-counter transactions and custody businesses.
The government aims to allow licensed spot ETFs to provide staking services as well. These combined efforts show Hong Kong’s determination to accelerate growth in its crypto industry.
English (US) ·