Hong Kong’s Securities and Futures Commission (SFC) has introduced new regulations permitting licensed crypto exchanges and exchange-traded funds (ETFs) to offer staking services.
The move, which was announced on April 7, aims to enhance the city’s position as a digital asset hub while ensuring investor protection and confidence.
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Strict controls and transparency are required
Staking allows crypto holders to earn passive income by locking up their assets to support blockchain networks, particularly those using Proof-of-Stake (PoS) systems like Ethereum. The SFC emphasized that staking provides yield opportunities and enhances network security.
Under the new rules, Virtual Asset Trading Platforms (VATPs) must maintain complete control over clients’ staked assets and cannot outsource staking to third parties without regulatory approval. Also, they must disclose risks, including potential hacking, validator failures, and lock-up periods.
SFC CEO Julia Leung stated, “Broadening the suite of regulated services and products is crucial to sustain the healthy advancement of Hong Kong’s virtual asset ecosystem. But the broadening must be done in a regulated environment where the safety of client virtual assets continues to be front and center.”
For ETFs, staking is permitted only through licensed platforms or authorised institutions with strict liquidity risk controls. Fund managers must further disclose staking-related risks and returns to investors.
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A contrast to global approaches
Hong Kong’s approach differs from rivals like Singapore, which banned retail staking in 2023, and the U.S., where regulators have taken a restrictive approach. The SFC’s move aligns with its “Asset and Wealth Management, Sustainable Finance, Private Markets, and Real Economy (ASPIRe)” roadmap, which seeks to expand regulated crypto services while maintaining robust oversight.
The decision comes as global competition for crypto dominance heats up, with Hong Kong positioning itself as a leader in institutional-grade digital asset services.
“We have noted investors’ demand for staking services and the potential for staking activities to contribute to the security of the blockchain network,” the SFC added.
The new rules take immediate effect, marking another step in Hong Kong’s push to become a crypto-friendly financial hub.
