SFC Hongkong Sets Clear Crypto Staking Rules, Reinforces Web3

Hong Kong's leading financial regulator, the Securities and Futures Commission (SFC), has unveiled new staking rules for cryptocurrency exchanges that provide services. This is a part of Hong Kong's wider initiative to establish itself as a global Web3 and digital assets leader.

The SFC issued the news on April 7 via circular to trading platforms of crypto that are under its supervision. The regulator acknowledged that these activities can aid in the security of blockchain networks and provide rewards to investors—albeit properly overseen and with transparency.

Key Requirements for Crypto Exchanges in Staking Rules

As per the new staking rules, crypto exchanges are required to first get written consent from the SFC before offering any said services. Concerned parties are also not allowed to give custody of the digital currency which are engaged in such activities to any third party platforms. There has to be transparency, in a way that exchanges need to disclose risks, fees, outages, withdrawal processes and the assets keeping way.

Additionally, the exchanges have to report their activities periodically to the SFC.

New Staking Rules for Crypto Funds

The Staking rules don't just cover exchanges. The SFC also sent out a similar notice to crypto funds under its jurisdiction. Any fund that has invested more than 10% of its assets in digital currencies is required to adhere to the new staking rules.

These monies have the ability to utilize only publically available digital assets on SFC-authorized platforms. Fund managers will have to ensure that the activities are aligned with the fund's strategy. If such activities radically alters the strategy or risk profile of the fund, they will have to inform investors and may even require shareholder sanction. Transparency and risk management are still paramount.

Web3 Support and NFT Market Outlook

The update came alongside comments from Christina Choi, the SFC’s Executive Director of Investment Products, at the Hong Kong Web3 Festival. She reaffirmed Hong Kong’s commitment to building a strong and healthy Web3 ecosystem.

Choi said the technology is growing but still evolving. She cautioned against blindly following trends, referencing the sharp drop in NFT trading volume —down 70% in the past year—as a lesson in market volatility.

"We are committed to a pragmatic solution — driving the fundamentals and cultivating a supportive ecosystem in which Web3 can thrive," she said.

Why Web3 Businesses Need to Opt for Hong Kong

Choi also pointed out that Hong Kong is third in the Global Financial Centres Index and enjoys excellent access to the Asian market. With transparent regulations and visionary policies, Hong Kong is looking to lure more Web3 businesses to establish themselves locally.

ASPIRe Roadmap

The SFC's latest action of introducing staking rules complements its previous efforts, such as the introduction of the "ASPIRe" roadmap—a strategy aimed at developing a future-proof crypto ecosystem. With 12 initiatives spread across five dimensions, ranging from market access to blockchain efficiency, the plan aims to enhance the city's positioning in the digital asset economy.