Hong Kong’s Securities and Futures Commission (SFC) has officially authorized licensed virtual asset trading platforms to offer staking services. This step is aimed at enhancing the city’s reputation as a key center for digital assets in the Asia-Pacific region.

The announcement occurred on Monday, April 7, 2025, alongside a keynote address by SFC Executive Director Christina Choi at the 2025 Hong Kong Web3 Festival. Choi, who is in charge of the regulator’s Investment Products Division, pointed out the rapid pace of technological innovation. She humorously remarked on how blockchain could transform finance by likening it to her son confusing a floppy disk with a 3D-printed save icon.

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Hong Kong Approves Regulated Crypto Staking Under New Oversight Rules

Staking, the process where users lock their cryptocurrencies to assist blockchain operations in exchange for rewards, is now permissible under strict regulatory oversight. The SFC’s updated guidelines mandate that licensed platforms maintain custody of staked assets and seek prior approval before offering staking to users. Additionally, platforms must retain control over all mechanisms associated with withdrawals.

The SFC’s circular emphasizes the importance of transparency concerning staking-related risks, which include slashing penalties, unstacking procedures, lock-up periods, and potential vulnerabilities such as hacking or network inactivity.

This regulatory update follows a broader roadmap introduced by the SFC in February, which aims to expand investor access to digital assets, strengthen regulatory oversight, and broaden the range of tradable virtual assets.

Quote:

“The Hong Kong government announced that legislation on stablecoins will be forthcoming, along with the establishment of compliance licenses for over-the-counter transactions and custody businesses. Licensed spot ETFs will also be permitted to offer staking services….”

— Wu Blockchain (@WuBlockchain) April 7, 2025

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Hong Kong has positioned itself as a leader in regulated digital finance within Asia. In April 2024, it became the first jurisdiction in the region to approve spot Bitcoin and Ethereum ETFs. A recent report from financial giant State Street suggests that Hong Kong’s digital asset market could surpass $700 billion in 2025, potentially elevating it above Japan as Asia’s largest ETF market.

Christina Choi reflected:

“Just as the floppy disk transformed how we stored information, blockchain has the potential to rewrite the rules of finance.”

Hong Kong Grants Crypto Licenses To PantherTrade And YAX, Raising Total To Nine

Earlier in the year, the SFC issued operational licenses to crypto exchanges PantherTrade and YAX, increasing the total number of licensed virtual asset trading platforms to nine since the regulatory framework was established in mid-2024. The SFC originally aimed to approve 11 platforms by the end of 2024, but delays have extended the target into early 2025. Six additional applicants, including WhaleFin Markets and Flying Hippo Technologies, are still being reviewed.

The licensing regime is designed to enforce strict compliance standards regarding investor protection, cybersecurity, and operational integrity as Hong Kong seeks to compete with jurisdictions like Singapore that are moving quickly in this sector.

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Key Takeaways

• Hong Kong’s SFC now allows licensed crypto platforms to offer staking under strict regulatory guidelines.
• Platforms must seek prior approval and clearly disclose risks such as slashing, lock-up periods, and security vulnerabilities.
• This initiative is part of Hong Kong’s broader strategy to lead Asia’s digital asset sector and grow its $700 billion crypto market.