Hong Kong's Securities and Futures Commission (SFC) Has Rolled Out Fresh Guidelines for Licensed Virtual Asset Trading Platforms and SFC-Authorized Funds Involved in Staking

In a move to tighten oversight in the crypto space, Hong Kong’s Securities and Futures Commission (SFC) has rolled out fresh guidelines for licensed virtual asset trading platforms and SFC-authorised funds involved in staking.

Hong Kong’s Securities and Futures Commission (SFC) has unveiled fresh guidelines for licensed virtual asset trading platforms and SFC-authorised funds engaging in staking.

The SFC’s new rules highlight the benefits of staking, such as boosting blockchain security and aiding investors in gaining yields within a regulated framework. This guidance permits licensed crypto platforms to provide a wider range of services, supporting the SFC’s “ASPIRe” plan to expand Hong Kong’s virtual asset market.

The SFC is granting new powers to licensed crypto platforms to offer staking services to retail investors, while also setting clear rules to enhance investor protection.

Platforms must segregate and safeguard staked assets, prevent any service errors, and maintain full transparency with investors about the risks involved in crypto staking.

The SFC also aims to boost the safety of crypto staking by setting limits on the amount that SFC-authorised VA Funds can allocate for staking, and stipulating that such activities must be performed through licensed platforms or approved institutions in another jurisdiction.

This move follows the SFC’s earlier initiative to permit limited crypto derivatives trading by retail investors, a decision that sparked mixed reactions among industry experts.

Hong Kong is striving to expand its cryptocurrency regulations in a move to become a global crypto hub.

The SFC’s ASPIRe framework, which stands for Access, Safeguards, Products, Infrastructure, and Relationships, is designed to streamline market access for firms and investors, and to bolster investor protection.

Earlier this year, the SFC announced plans to establish new licensing regimes for over-the-counter virtual asset trading and custody services in Hong Kong, seeking to improve market efficiency and investor safeguards.