In a notable shift toward more crypto-friendly regulation, Hong Kong’s Securities and Futures Commission (SFC) has issued fresh guidance that officially allows licensed crypto exchanges and authorized virtual asset funds to offer staking services - marking a significant step in the city's ambition to become a global hub for digital assets.
The new framework, released on Monday, underscores investor protection and platform accountability as top priorities. Under the rules, Virtual Asset Trading Platforms (VATPs) - Hong Kong’s term for licensed crypto exchanges - must maintain full control over client assets, with no third-party delegation of staking functions permitted. The SFC also requires platforms to provide comprehensive risk disclosures, covering issues like blockchain malfunctions, validator downtime, and potential cyber threats.
This development aligns with the SFC's broader digital asset initiative under its "ASPIRe" roadmap, which seeks to establish a regulated yet innovation-supportive environment. “Broadening the suite of regulated services and products is crucial to sustain the healthy advancement of Hong Kong’s virtual asset ecosystem,” said Julia Leung, SFC’s CEO. “But the broadening must be done in a regulated environment where the safety of client virtual assets continues to be front and center.”
A Tighter, Transparent Staking Regime
The SFC’s circular introduces clear operational standards for staking, aiming to mitigate liquidity and security risks. VATPs must disclose all relevant staking mechanics, including fees, lock-up periods, validator practices, and business continuity plans during disruptions. This transparency is intended to help users better evaluate the benefits and risks of participating in staking programs.
In addition to exchanges, authorized virtual asset funds are also permitted to engage in staking under tightly controlled conditions. These funds must only use licensed platforms or authorized institutions, and the SFC has imposed a staking cap to manage redemption and liquidity concerns.
A Regional Divergence on Retail Staking
Hong Kong’s green light for staking sharply contrasts with the policy stances of other financial centers. Singapore, for example, banned retail staking in 2023, citing investor protection concerns. The U.S. Securities and Exchange Commission (SEC), meanwhile, has taken an enforcement-heavy approach, initiating lawsuits against major players like Coinbase over their staking offerings - though momentum is growing in Washington to reassess the crackdown.
Notably, Illinois recently dropped its staking-related lawsuit against Coinbase, following similar moves in other states - suggesting that regulatory attitudes in the U.S. could be softening under political pressure.
With its new guidance, Hong Kong positions itself as a middle path between innovation and regulation. By creating a controlled environment for staking, the city aims to attract institutional capital and offer compliant yield-generation mechanisms, particularly in the Proof-of-Stake (PoS) ecosystem that underpins blockchains like Ethereum, Solana, and others.
As global jurisdictions diverge on how to regulate crypto staking, Hong Kong’s rules offer a model for supervised participation, balancing blockchain-native features with traditional financial safeguards.