Hong Kong’s Securities and Futures Commission (SFC) has unveiled formal rules governing cryptocurrency staking services, aiming to foster innovation in the city’s digital asset landscape. The new framework was announced on April 7th, providing clarity for platforms operating in the region, offering a pathway for licensed virtual asset trading platforms to engage in staking activities under strict conditions. Exchanges must obtain prior approval before offering staking, hold full custody of staked assets, and ensure users are fully informed about fees, lock-up periods, and associated risks. They will also be required to report their staking activities directly to the regulator. Funds with over 10% exposure to digital assets are subject to these new regulations as well. These funds can participate in staking if aligned with investment objectives, yet must disclose relevant risks, seek investor consent when necessary, and avoid leveraged exposure. The SFC’s executive, Christina Choi, emphasized a sustainable regulatory approach that fosters innovation, acknowledging recent setbacks in sectors like NFTs while advocating for a long-term perspective on the broader digital asset space. Hong Kong’s commitment to clarity and market access has attracted global interest from various crypto businesses. The SFC recently unveiled its ASPIRe roadmap, outlining initiatives to streamline digital asset compliance, solidifying its position as a leading hub for trading and innovation in the industry.