Hong Kong Introduces Cryptocurrency Staking Rules
Hong Kong’s Securities and Futures Commission (SFC) has issued new guidance for crypto exchanges and locally authorized funds offering staking services.
In an announcement on April 7, the SFC introduced rules aimed at regulating staking services, following earlier remarks by Christina Choi, the SFC’s executive director of investment products, who stated during the Hong Kong Web3 Festival:
“The SFC is committed to supporting Hong Kong’s Web3 journey.”
The regulator acknowledged the role of staking in strengthening blockchain security and offering yield opportunities to investors.
As a result, crypto exchanges are now permitted to provide staking services under the new framework.
Chen Wu, co-founder and CEO of Hong Kong-based, SFC-licensed exchange Ex.io, welcomed the development and expressed support for the move to provide staking under well-defined rules. She said:
“The SFC’s announcement signals that more doors are opening — not just for staking, but for a wider range of Web3 products to take shape under a regulated and trusted framework.”
“Hong Kong is positioning itself not just as a compliant market, but as a real hub for Web3 adoption, where users’ interests are protected without slowing down progress,” Wu added.
The updated requirements were communicated via a circular to regulated exchanges.
Exchanges must now obtain written approval before offering staking, maintain direct control over staked assets, and avoid delegating custody to third parties.
They must also disclose all relevant risks, fees, lock-up periods, unstaking procedures, outage plans, and custodial arrangements to users. Reporting of staking activities to the SFC is also mandatory.
A similar circular was sent to crypto fund operators regulated by the SFC.
The new rules apply to funds with more than 10% of their assets invested in digital assets.
Such funds may only invest in assets available to the public through SFC-authorized platforms and are prohibited from using leverage.
Staking is allowed if it aligns with the fund’s objectives and includes proper risk controls and disclosures.
Material changes may require notifying investors or obtaining shareholder approval.
In her speech, Choi emphasized that Web3 is still evolving and noted that the sector will face challenges as it matures.
She cited the downturn in the NFT space as an example of the need for a balanced regulatory approach:
“Therefore, 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 came shortly after Bybit announced it would shut down its NFT marketplace, joining other platforms like X2Y2 that have exited due to declining market interest.
NFT trading volumes have dropped significantly, falling from over $18 million a year ago to $5.34 million when Bybit’s closure was announced—a 70% decline.
Choi also highlighted why Web3 firms should consider Hong Kong as a base, pointing to the city’s third-place ranking in the Global Financial Centres Index, clear regulatory guidance, and proximity to Asian markets.
In closing, she emphasized the intersection of traditional finance and digital innovation:
“We stand today at the crossroads where traditional finance and the digital economy are converging to drive promising outcomes for our financial markets.” She added:
“The zero-to-one breakthrough has been made, and its future success would very much depend on how we nurture this convergence, that is, how we go from one to 100.“
Her remarks align with Hong Kong’s efforts to become a global crypto hub, including the launch of its ASPIRe roadmap—a strategic plan featuring 12 initiatives across five categories to strengthen virtual asset infrastructure, streamline compliance, and boost blockchain efficiency.
Sources:
https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=25PR47
https://apps.sfc.hk/edistributionWeb/gateway/EN/circular/doc?refNo=25EC22
https://apps.sfc.hk/edistributionWeb/gateway/EN/circular/doc?refNo=25EC21
Try to invite your friends and earn together
10% of trading fees of your friends and 5% from the earnings of your friends.
