Hong Kong’s financial regulators have allowed crypto firms with valid trading licenses to offer staking services, as the Securities and Futures Commission (SFC) announced on April 7.
These firms must follow strict guidelines to protect users and ensure transparency about the risks of staking virtual assets.
Staking allows customers to earn yields on their cryptocurrency by “locking up” their assets for a specified period. This process typically involves a proof-of-stake consensus mechanism, where platforms generate returns from the staked assets and distribute them to investors. This feature offers an attractive opportunity for crypto holders to earn passive income. Still, it comes with inherent risks, so regulators have introduced guidelines to ensure customer protection.
Crypto firms must obtain formal approval from the SFC before offering staking services, adhering to specific requirements for customer safety and regulatory compliance. The SFC has updated its framework for virtual asset funds, mandating that companies partner only with licensed Virtual Asset Trading Platforms (VATPs) and authorized institutions. This approach ensures consistent oversight and reduces potential risks for investors.
Julia Leung, Chief Executive Officer of the SFC, highlighted that expanding the virtual asset guidelines to include crypto staking products is essential in fostering the growth of Hong Kong’s digital asset ecosystem. She further emphasized,
“However, this expansion must occur within a regulated framework, where the safety of client virtual assets remains the top priority in the compliance structure for offering such services.”
To strengthen its regulatory efforts, the SFC has also proposed expanding its workforce. As part of its 2025-2026 financial year budget, the regulator plans to add 15 new positions. Eight of these roles will be dedicated to supporting the development of virtual asset regulatory frameworks, market surveillance, and enforcement investigations, signalling Hong Kong’s commitment to becoming a leading hub for cryptocurrency innovation while maintaining a strong regulatory environment.
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