Hong Kong’s Securities and Futures Commission (SFC) has unveiled new regulations governing crypto staking, reinforcing its commitment to Web3 innovation. The new guidelines require crypto exchanges to obtain written approval before offering staking services and mandate that they retain control over staked assets rather than delegating custody to third parties. These measures aim to enhance investor protection and ensure transparency in staking operations.
The SFC’s announcement aligns with Hong Kong’s broader strategy to position itself as a global hub for digital assets. The regulator acknowledges the benefits of staking in securing blockchain networks and providing yield opportunities for investors. However, exchanges must disclose all relevant risks, including fees, lock-up periods, and unstaking processes, to their customers.
Regulatory Expansion to Crypto Funds
Additionally, the new rules extend to crypto funds with more than 10% of their net asset value invested in digital assets. These funds can engage in staking only if it aligns with their investment objectives and is accompanied by clear disclosures and robust risk controls. The SFC’s move is part of its “ASPIRe” initiative, which aims to optimize regulatory compliance and enhance blockchain efficiency.
Industry leaders have welcomed the regulations, viewing them as a step toward legitimizing staking services under a regulated framework. Chen Wu, CEO of Hong Kong-based crypto exchange Ex.io, stated that the new rules signal growing acceptance of Web3 products within a compliant market. The SFC’s proactive stance is expected to attract more institutional players to Hong Kong’s crypto ecosystem.
Despite the positive reception, some market participants have raised concerns about the potential impact on staking yields and liquidity. The requirement for exchanges to maintain direct custody of staked assets may limit flexibility for investors seeking higher returns through third-party staking providers. Nonetheless, the regulations are seen as a necessary step to balance innovation with investor protection.
Hong Kong’s commitment to Web3 extends beyond staking regulations. The city has been actively fostering blockchain adoption through initiatives such as NFT marketplaces and decentralized finance (DeFi) projects. The SFC’s latest move reinforces its vision of becoming a leading digital asset hub while ensuring regulatory clarity for market participants.
Shogun Lin
