New Crypto Staking Regulations Introduced by Hong Kong’s SFC
Hong Kong’s Securities and Futures Commission (SFC) has introduced new rules for crypto exchanges and funds that engage in staking, as part of the city’s broader push to establish itself as a regulated and innovative Web3 hub.
In a statement on April 7, the SFC outlined the benefits of staking to blockchain security and investor yield. Licensed crypto exchanges can now offer staking services under strict compliance regimes, once again reaffirming the city’s Web3 ambitions.
Clear Guidelines for Exchanges and Funds
The new regulations mandate crypto exchanges to obtain prior written approval to offer staking, exercise complete control over staked assets, and not delegate custody. They are also required to disclose fees, lock-up periods, and other relevant risks to users, and report activities directly to the SFC.
For funds, the guidance applies to those with over 10% of net asset value exposure to digital assets. These funds must ensure that staking aligns with their investment objectives and that there are strong controls and disclosures in place. Staking may require shareholder approval if it would significantly alter risk profiles.
Strengthening Fundamentals Amid NFT Market Decline
At the Hong Kong Web3 Festival, SFC executive director Christina Choi conceded the volatility in segments like NFTs. She advocated a pragmatic, fundamentals-first approach to the building of Web3, over chasing hype cycles.
NFT trading volume has fallen nearly 70% year-on-year, prompting some large platforms like Bybit and X2Y2 to shut down their marketplaces. The downturn underscores how sensible regulation is key to emerging digital industries.
Hong Kong’s Web3 Vision Gains Momentum
Choi cited Hong Kong’s reputation as a global financial center and the presence of clear regulatory pathways for crypto businesses. These, she added, make the city a suitable headquarters for Web3 companies seeking to push into the Asia-Pacific market.
The city’s ASPIRe roadmap — 12 steps to modernize and safeguard the virtual asset ecosystem — continues to solidify its vision to spearhead the digital financial future.
We are here today at the point where traditional finance and the digital economy intersect,” Choi added. “The zero-to-one breakthrough has been achieved. Now, we build.”.
