Thomas Daniels
In a strategic move to consolidate its position as a global hub for blockchain and digital assets, Hong Kong’s Securities and Futures Commission (SFC) has introduced comprehensive regulatory guidelines for crypto staking services. The rules, issued on April 7, mark a pivotal development in the city’s ambition to foster a robust and sustainable Web3 ecosystem.
Under the new framework, licensed virtual asset trading platforms (VATPs) must secure written approval from the SFC prior to offering staking services. These platforms are also required to maintain direct custody of staked digital assets, with a strict prohibition on delegating asset control to third parties. Furthermore, exchanges must provide full transparency regarding staking-related risks, including fees, minimum lock-up durations, unstaking mechanisms, service outages, and custodial arrangements. Ongoing disclosure of staking activity to the regulator is mandatory.
Parallel provisions have been set for SFC-authorized crypto funds with digital asset exposure exceeding 10% of their net asset value. These funds may engage in staking activities only through platforms approved by the SFC and are barred from any leveraged exposure. The regulations stipulate that such engagements must align with the fund’s investment mandate, and material shifts in strategy or risk exposure may trigger requirements for investor notices or shareholder approvals.
The regulatory update coincides with remarks from Christina Choi, the SFC’s Executive Director of Investment Products, during her keynote address at the Hong Kong Web3 Festival. Choi reaffirmed the Commission’s commitment to a measured regulatory approach, cautioning against speculative excesses, such as those seen in the volatile non-fungible token (NFT) market. She emphasized the need to prioritize long-term resilience over short-term innovation, stating:
“Rather than chasing every new spark, we believe in a pragmatic approach—strengthening the fundamentals and fostering a supportive ecosystem where Web3 can thrive in a sustainable manner.”
This measured stance follows a downturn in the NFT sector, highlighted by the closure of Bybit’s NFT marketplace and similar actions by leading platforms like X2Y2, amid a 70% decline in daily trading volumes over the past year.
Looking ahead, the SFC is advancing its “ASPIRe” roadmap, a strategic initiative comprising 12 key actions across five pillars: Access, Safeguards, Products, Infrastructure, and Relationships. This initiative is designed to modernize the regulatory framework, expand market access, and reinforce blockchain efficiency, further positioning Hong Kong as a leading jurisdiction for virtual assets.
Choi concluded her address with a vision of convergence between traditional finance and digital innovation, asserting, “The zero-to-one breakthrough has been made, and its future success will very much depend on how we nurture this convergence—that is, how we go from one to 100.”
Hong Kong’s regulatory clarity, strategic location, and established financial infrastructure continue to make it an attractive destination for Web3 enterprises seeking scalable growth within a secure, well-regulated environment.
