TLDR
- Hong Kong’s SFC now allows licensed exchanges to offer crypto staking services
- Platforms must maintain full control of client assets and disclose all staking risks
- Prior written approval from SFC required before launching staking services
- Move contrasts with Singapore’s retail staking ban and SEC’s restrictive stance
- Hong Kong continues expanding crypto regulation as part of its “ASPIRe” roadmap
Hong Kong’s Securities and Futures Commission (SFC) has issued new guidance permitting licensed virtual asset trading platforms (VATPs) and authorized funds to offer crypto staking services. The announcement, made on April 7, 2025, marks another step in Hong Kong’s push to develop its digital asset ecosystem while maintaining regulatory oversight.
Staking allows crypto holders to earn passive income by locking up their digital assets for a certain period. The process is key to Proof of Stake (PoS) networks, providing security and immutability to blockchain systems while generating returns for participants.
Under the new guidelines, crypto firms with VATP licenses can add staking to their service offerings after receiving formal approval from the SFC. This requirement ensures platforms meet specific standards before launching these yield-generating products.
Customer Protection Requirements
The regulatory framework prioritizes client safety. Licensed platforms must retain complete control of customers’ assets, with explicit prohibitions against outsourcing staking operations to third parties.
Transparency is another core requirement. Exchanges must clearly disclose all risks associated with staking, including potential vulnerabilities like blockchain errors, hacking threats, or validator inactivity that could affect returns.
VATPs must also provide detailed information about the staking process, fee structures, minimum lock-up periods, and arrangements for business continuity during any service disruptions. These measures aim to ensure customers make informed decisions about participating in staking activities.
For authorized virtual asset funds, the rules mandate staking only via licensed platforms or authorized institutions. The SFC has also imposed caps to manage liquidity risks, reflecting a balanced approach to innovation and protection.
Regional Regulatory Contrast
Hong Kong’s approach stands in contrast to other major financial centers. Singapore, a regional competitor, banned retail staking in 2023, citing investor protection concerns.
The U.S. Securities and Exchange Commission continues to restrict staking through enforcement actions, though it faces growing pressure from bipartisan senators to ease its stance. Several U.S. states, including Illinois most recently, have dropped staking lawsuits against Coinbase that began in 2023.
Julia Leung, SFC’s Chief Executive Officer, emphasized the importance of balanced regulation.
“Broadening the suite of regulated services and products is crucial to sustain the healthy advancement of Hong Kong’s virtual asset ecosystem,” she stated in the release. “But the broadening must be done in a regulated environment where the safety of client virtual assets continues to be front and center.”
The staking guidelines form part of Hong Kong’s broader “ASPIRe” roadmap for developing its digital asset sector. This strategic plan aims to position Hong Kong as a competitive hub for crypto innovation while maintaining regulatory standards.
Future Regulatory Plans
Hong Kong regulators have been criticized for their initially slow-moving licensing process, which some observers felt put them behind other Asian countries. However, the pace of regulatory development appears to be accelerating.
At the Hong Kong Web3 Festival 2025, the government announced plans to introduce stablecoin legislation in the near future. This initiative will come alongside licenses for over-the-counter transactions and custody businesses.
The government also aims to allow licensed spot ETFs to provide staking services, further expanding the range of regulated crypto activities in the territory. These moves demonstrate Hong Kong’s commitment to creating a comprehensive framework for digital assets.
For firms interested in offering staking services, the path forward now involves applying for prior written approval from the SFC. This process will include reviewing their ability to meet all the requirements outlined in the new guidance.
The introduction of regulated staking services offers Hong Kong-based crypto users a new option for generating yield from their holdings. By doing this within a regulated environment, the SFC aims to balance innovation opportunities with needed consumer protections.
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