Hong Kong SFC Lifts Staking Ban, Tightens Oversight, and Boosts UAE Crypto Cooperation
Hong Kong’s Securities and Futures Commission (SFC) has introduced significant updates to its crypto regulation by lifting the ban on staking services for licensed virtual asset trading platforms. This regulatory change, announced during the Web3 Festival, requires platforms to fully control staked client assets, ensure transparency around risks, fees, and lock-up periods, and restrict the use of third-party custodians unless comprehensive due diligence is performed. This move reverses the ban set in mid-2023 and aims to offer greater protection to crypto investors through strengthened compliance and oversight. Concurrently, the SFC is extending international cooperation, recently holding talks with major regulators in Abu Dhabi and Dubai to discuss cross-border oversight and regulatory models for digital assets. These initiatives are central to Hong Kong’s ASPIRe framework, which targets positioning the city as a global leader in regulated digital finance. The regulatory reforms and enhanced partnerships are expected to boost institutional involvement, improve regulatory clarity, and stimulate increased trading activity in Hong Kong’s crypto market.
Bullish
The removal of the staking ban for licensed platforms in Hong Kong signals a pro-growth regulatory stance and offers greater clarity for both institutional and retail participants. The new rules enhance investor protection and operational transparency, fostering a safer environment for participation in staking and broader crypto trading. Additionally, the strengthened international cooperation with UAE regulators suggests cross-border momentum and global legitimacy for the region’s crypto sector. Historically, regulatory clarity and expansion of compliant services often catalyze market optimism and increased activity. Thus, the updates are likely to have a short-to-medium term bullish effect on Hong Kong’s crypto market, particularly in attracting institutional funds and enhancing market liquidity.