The financial and new crypto regulator of Hong Kong just made a substantial move. The Securities and Futures Commission launched new regulations on April 7. Those are aimed at licensed virtual asset trading platforms. The end result is clear: staking is on, but only with strong guardrails.
Under the new directive, staking services can be made available by platforms. It means that users earn a return on their locked cryptocurrency. There’s a caveat, however: companies need to protect client funds, minimize risks, and clearly outline all the risks at the outset. No fine print, no semantics, just transparency.
The SFC looks at staking as something bigger than a trend. It considers staking to be contributing to the security of a blockchain. It also provides investors with a means of receiving stable returns. That’s a boon for the local virtual asset arena. The new regulations are a good fit for the SFC’s ASPIRe roadmap. That’s the five-pronged plan of the city towards establishing a secure and open crypto economy.
The SFC didn’t stop at trading platforms. It also revised rules for crypto investment funds. These are called VA Funds. Now, they can stake as well, though just on strict terms. The funds can stake assets, though, only with licensed platforms or approved institutions. There is a limit to containing liquidity risks.
A safer path to crypto growth in Hong Kong
However, risk controls aren’t optional. The SFC drove that home. Platforms need to shield users from service malfunctions, asset loss, or fraud. Separate staked assets from company money. And if something happens, users need to know what they’re getting into. That means simple-to-understand risk disclosures.
Julia Leung, CEO of the SFC, succinctly encapsulated that wider services are important. But not at the expense of safety. Balance was what was called for, she emphasized. People are encouraged to be innovative, just as long as it happens within a transparent, robust rulebook.
Hong Kong has been quickly moving towards becoming a virtual asset hub. New regulations are another giant leap. They indicate a determination on the part of the city to let crypto grow, just in a clean, safe manner.
Nonetheless, the SFC move opens the door for legitimate platforms to grow. It keeps investors safe from the storm that can brew in the world of crypto. Clear regulation provides confidence. And confidence is what draws in long-term funds. Platforms are given the green light as of today. But they will need to be careful. The guidelines are out, everything is at stake, and the city is watching.
