Hong Kong's SFC Approves Staking for Licensed Platforms, Strengthening Crypto Regulations

Hong Kong Paves the Way for Regulated Crypto Staking Services

The Securities and Futures Commission (SFC) of Hong Kong has officially sanctioned licensed virtual asset trading platforms to offer staking services, marking a significant development in the city's push to become a prominent player in the global crypto market.

The decision, announced on Monday, 7 April 2025, signals a move towards enhanced regulation in the growing sector of digital assets.

Regulatory Framework Brings New Clarity to Staking Services

Staking, the process where users lock their digital assets to support blockchain networks in return for rewards, is now officially governed under Hong Kong’s latest regulatory guidelines.

Under the new framework, licensed platforms must take full custody of staked assets and secure prior approval from the SFC before offering these services to users.

This ensures tighter controls on withdrawals and safeguards to prevent potential errors and losses.

The SFC’s guidelines mandate that platforms clearly disclose all associated risks, such as slashing penalties, unstacking processes, and lock-up periods.

Moreover, platforms are required to address vulnerabilities like hacking and network inactivity, providing investors with a more transparent and secure staking environment.

Hong Kong’s Vision for a Digital Asset Hub

Hong Kong's continued effort to strengthen its position as a leading crypto hub in Asia is evident through these regulatory updates.

The SFC’s “ASPIRe” plan, which focuses on Access, Safeguards, Products, Infrastructure, and Relationships, aims to open more doors for virtual asset services while bolstering investor protection.

This strategy also reflects the city's long-term goals of streamlining market access and enhancing oversight to manage risks effectively.

In a keynote speech at the Hong Kong Web3 Festival, Christina Choi, Executive Director at the SFC, explained how blockchain technology is poised to reshape financial systems, much like the floppy disk did for data storage years ago.

She remarked,

"Just as the floppy disk transformed how we stored information long before Web 1.0 took hold, blockchain technology has the potential to rewrite the rules of finance and beyond,"

A New Era for SFC-Approved Virtual Asset Funds

Alongside these new guidelines, the SFC has also revised its regulations for SFC-authorised virtual asset funds, permitting them to stake assets—but only through licensed platforms or approved institutions.

A cap has been placed on the amount they can stake, reducing liquidity risk and helping safeguard investors from market volatility.

SFC’s Roadmap to Enhance Market Access

These updates are part of a broader strategy the SFC began rolling out in early 2025 to increase investor access to digital assets while tightening regulatory safeguards.

Earlier in February, the commission revealed plans to introduce new licensing regimes for over-the-counter virtual asset trading and custody services, further expanding the range of virtual assets available for trade in Hong Kong.

Momentum Builds for Hong Kong’s Digital Asset Market

Hong Kong is swiftly becoming a central player in regulated digital finance, particularly after becoming the first jurisdiction in Asia to approve Bitcoin and Ethereum spot ETFs in April 2024.

A report from financial services firm State Street has forecast that Hong Kong’s digital asset market could surpass $700 billion this year, potentially overtaking Japan as the largest market in Asia.

These new regulations in Hong Kong offer clearer guidance for current platforms and could serve as a benchmark for other regions looking to oversee digital assets.

The SFC's proactive approach to shaping Hong Kong's crypto future demonstrates the city's aim to balance investor protection with fostering innovation in the fast-growing virtual asset space.