The Hong Kong Securities and Futures Commission (SFC) has announced new regulatory guidance allowing licensed virtual asset trading platforms (VATPs) and exchange trade funds (ETFs) to provide staking services. The initiative is part of Hong Kong’s broader roadmap to establish itself as a key player in the crypto sector.
SFC highlighted the growing demand from investors for services that can increase security in blockchain networks. However, VATP must ensure prior written approval from the SFC before starting the staking service. Similarly, Crypto ETFs are also necessary to obtain consent to regulations to engage in staking activities.
The guidelines require companies to implement safeguards to prevent errors related to the staking process, ensure protection of client piles, and transparently disclose relevant risks.
This regulatory development coincides with the government’s February announcement of a comprehensive plan to strengthen regional crypto frameworks. The roadmap includes 12 key initiatives, including new token lists, margin trading, borrowing and lending.
Hong Kong’s proactive stance will spark VATPS’s newly established licensing system, which began in June 2023, enabling licensed exchanges to provide retail trading services.
SFC CEO Julia Leong said expanding the scope of regulated products and services is essential to the sustainable growth of Hong Kong’s virtual asset ecosystem.
Hong Kong is aiming to accelerate its crypto initiatives, particularly as competition intensifies globally due to recent pro-crypto developments in the US. SFC emphasizes the importance of maintaining a regulatory framework that prioritizes the safety of client assets while encouraging innovation in the virtual asset market.