On April 7, 2025, the Securities and Futures Commission ("SFC") provided regulatory guidance for licensed virtual asset trading platforms ("VATPs") on staking services and for SFC-authorised funds with virtual asset exposure.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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On April 7, 2025, the Securities and Futures Commission ("SFC") issued regulatory guidance to licensed virtual asset trading platforms ("VATPs") and SFC-authorized funds with exposure to virtual assets (VA Funds) regarding their involvement in staking.
The SFC acknowledges the advantages of staking in enhancing blockchain security and providing investors with yield opportunities, aligning this latest guidance with the five pillars of the SFC’s ‘ASPIRe’ roadmap to foster Hong Kong’s virtual asset ecosystem.
The SFC emphasizes that VATPs must manage risks to investors by preventing service errors, protecting staked client virtual assets, and disclosing associated risks. VATPs require prior written approval from the SFC to offer staking services, contingent upon specific licensing conditions.
The SFC also revised its circular for SFC-authorized VA Funds, permitting them to engage in staking. However, they must utilize licensed VATPs and authorized institutions for staking virtual asset holdings, with a cap to mitigate liquidity risks.
Ms. Julia Leung, SFC’s Chief Executive Officer, underscores the significance of expanding the suite of regulated services for Hong Kong’s virtual asset ecosystem, while ensuring the safety of client virtual assets in a controlled regulatory environment.
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