Financial authorities in Hong Kong have officially permitted cryptocurrency firms to offer staking services to their clients. However, they are required to follow guidelines designed to safeguard users from the inherent risks.
As stated in a notice released by the Securities and Futures Commission on April 7, any crypto companies holding a license for virtual asset trading platforms in the area may provide staking services. Nevertheless, they must implement necessary protections for clients and thoroughly disclose the potential risks tied to staking virtual assets.
Staking enables clients to earn returns on their cryptocurrency investments by essentially “locking up” the assets for a specified duration, during which they accrue interest. Typically, this feature is offered through a proof-of-stake consensus mechanism that creates returns to distribute among investors.
Before companies can begin to offer staking services as part of their offerings in Hong Kong, they need to obtain formal approval from the SFC. This prior written consent will outline specific stipulations that cryptocurrency platforms must adhere to prior to launching their staking services.
The SFC has indicated that it has revised its circular framework on virtual asset funds to streamline the process for staking. A key requirement is that companies can only engage with licensed virtual asset trading platforms and authorized institutions for staking activities involving crypto assets.
Hong Kong regulators strive to support the crypto sector
Julia Leung, Chief Executive Officer of the SFC, remarked that broadening their virtual asset regulations to include crypto staking products is vital for fostering growth within Hong Kong’s digital asset landscape.
“However, this expansion must occur within a regulated context where the protection of client virtual assets remains a focal point of the compliance framework for offering such services,” Leung noted in her remarks.
The regulatory bodies in Hong Kong have been taking steps to hasten the development of their cryptocurrency sector. By the close of 2024, the region faced criticism for its sluggish licensing procedures, lagging behind other Asian markets like Singapore.
Earlier today, during the Hong Kong Web3 Festival 2025, the local government announced plans to introduce stablecoin legislation along with licenses for over-the-counter transactions and custody services. Additionally, it aims to permit licensed spot ETFs to offer staking services.