Hong Kong introduces new rules for crypto staking
Hong Kong issues new staking rules for crypto exchanges and funds.
Hong Kong’s Securities and Futures Commission (SFC) has unveiled new regulatory guidelines governing staking services provided by cryptocurrency exchanges and fund managers, marking the latest step in the city’s drive to establish itself as a leading global hub for digital assets.
In an April 7 announcement, the SFC outlined requirements for crypto platforms to obtain written approval before offering staking services, reports Cointelegraph.
Under the new rules, exchanges must retain direct custody of staked assets, avoid outsourcing custody to third parties, and fully disclose risks, fees, lock-up periods, and other key terms to users. Platforms are also required to regularly report staking activities to the regulator.
The SFC also issued similar guidance to fund operators managing portfolios with more than 10% exposure to digital assets. These funds may only acquire tokens listed on SFC-authorized platforms and must refrain from using leverage. Staking activities are permitted if consistent with the fund’s objectives and if investor disclosures and risk controls are robust. Any material change to strategy or risk profile may require investor notice or shareholder approval.
Hong Kong’s Strategic Vision for Web3
The announcement follows remarks by Christina Choi, SFC executive director of investment products, during the Hong Kong Web3 Festival. Emphasizing the SFC’s commitment to “supporting Hong Kong’s Web3 journey,” Choi acknowledged the speculative pitfalls of sectors like NFTs but reiterated the city’s pragmatic regulatory approach aimed at long-term sustainability.
Choi pointed to Hong Kong’s ranking as the third most prominent global financial center and noted its clear regulatory framework and access to Asian markets as key draws for Web3 firms. Her comments come amid reports of a downturn in NFT markets, with platforms like Bybit and X2Y2 exiting the space after trading volumes fell over 70% in the past year.
The SFC’s moves align with the broader “ASPIRe” roadmap, a 12-point strategy aimed at optimizing regulatory compliance, improving blockchain efficiency, and enhancing market infrastructure to future-proof Hong Kong’s digital asset sector. As Choi concluded, “The zero-to-one breakthrough has been made,” adding that Web3’s success now depends on nurturing convergence between traditional finance and the digital economy.
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