Key Insights:
- Hong Kong has started permitting licensed virtual asset trading platforms to offer staking services to clients under strict conditions.
- The Securities and Futures Commission announced the policy change during the Hong Kong Web3 Festival 2025.
- The new circular requires platforms to fully control client assets without using third-party custodians.
Hong Kong has taken a definitive step by allowing licensed virtual asset trading platforms to offer staking services to clients. The Securities and Futures Commission (SFC) announced this new permission during the Hong Kong Web3 Festival 2025. This change shows a new strategy to regulate digital assets within Hong Kong.
Return-generating activities related to client assets can now operate because the regulations have changed following an earlier prohibition. The updated policy forms part of Hong Kong’s broader plan to strengthen its virtual asset infrastructure. It also reflects a growing alignment with global standards for digital asset regulation.
Crypto staking services, which operate in Hong Kong, must follow a strict set of new operational, disclosure, and security requirements. A new circular from the SFC established all the obligations platforms must meet.
Along with increased investor protection, the conditions also implement regulations that boost transparency from cryptocurrency companies operating in the city area.
Hong Kong Sets Strict Rules for Crypto Staking
The staking services of licensed virtual asset trading platforms (VATPs) require clearance from specific deployment requirements. All client assets managed by these trading platforms require complete control or possession by the platform operators. The new guidelines specifically forbid all VATPs from working with external custodians.
Organizations need to build and sustain powerful internal control systems to prevent operational threats. Stakeholder safety remains protected through adequate measures against hacking attacks, validator inactivity, and software failures that threaten asset safety. Every internal policy must receive regulatory inspection status due to its existence as documented records.
Crypto Staking protocols must provide complete program information to their customers on application websites and platforms. The platform must disclose the costs, restriction periods, unstaking details, and stakeholder security risks to users. Platforms must explain their methods for managing slashing incidents and other hazards of potential loss.
All staking outsource operations from platforms require regular assessment of security measures from external providers. VATPs need ongoing access to inspect the third party’s infrastructure, assess their track record, and manage all risk systems. External arrangements for the platform must meet SFC requirements while following the platform standards.
The SFC demands written authorization from VATPs who wish to provide crypto staking services. Hong Kong’s Commission will assess each platform’s preparedness for the issuance of customized licensing conditions. The firm’s License Agreement will contain these terms, which become legally binding.
Staking Requires Full SFC Pre-approval
The SFC grants special permission for Virtual Asset Funds to participate in staking when they fulfill the established guidelines. Staking activities from authorized virtual asset funds need to be conducted exclusively through licensed VATPs and approved institutional partners. Tight constraints exist to monitor asset holding and operational visibility for such purposes.
Staking-related activities from these funds need SFC approval before starting their operations. The management of crypto staking limit requirements effectively protects against possible liquidity risks to which these funds are exposed. The SFC performs proposal assessments, which include an evaluation of fund structure and operational capacity assessment.
The chosen staking activities should match the fund’s investment plans and risk management parameters. All information about staking activities, together with projected returns, must be present in official fund disclosures. Funds’ reporting duties include showing metrics related to performance and explaining losses from penalties applied to validators and network failures.
Approved funds should preserve complete documentation about their staking activities. It must show funds’ validator selection methods, performance reviews, and risk management plans. Updates regarding the staking activities need to be sent immediately to the SFC and other relevant stakeholders.
The regulatory guidelines avoid dangerous asset exposure yet actively support innovations within the virtual asset industry. This standard guarantees the protection of investor interests when operating in varied market settings. Crypto staking activities require participation from well-governed, qualified funds since governance is an eligibility requirement.
