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Hong Kong introduces crypto staking rules, reaffirms Web3 commitment

Hong Kong’s Securities and Futures Commission (SFC) has introduced new guidelines for crypto exchanges offering staking services.

In an April 7 announcement, the SFC announced new guidelines for crypto exchanges offering staking services and locally authorized funds exposed to digital assets involved in staking. The announcement follows recent remarks from Christina Choi, the SFC’s executive director of investment products, who said during a speech at the Hong Kong Web3 Festival:

“The SFC is committed to supporting Hong Kong’s Web3 journey.”

In its announcement, the regulator said it “recognizes the potential benefits of staking in enhancing the security of blockchain networks and allowing investors to earn yields.” Consequently, the latest guidance allows crypto exchanges to provide staking service offerings.

Chen Wu, co-founder and CEO of Hong Kong-based and SFC-licensed crypto exchange Ex.io, told Cointelegraph that the firm appreciates the regulator “allowing licensed platforms to offer staking services under clear and responsible guidelines.” She said:

“The SFC’s announcement signals that more doors are opening — not just for staking, but for a wider range of Web3 products to take shape under a regulated and trusted framework.”

“Hong Kong is positioning itself not just as a compliant market, but as a real hub for Web3 adoption, where users’ interests are protected without slowing down progress,” Wu added.

Related: Hong Kong investment firm’s shares surge 93% after buying just 1 Bitcoin

New rules for staking services

The new rules were communicated by the regulator in its latest circular sent to crypto exchanges under its jurisdiction. The SFC requires crypto exchanges to obtain written approval before offering staking services, retain control over staked virtual assets and not delegate custody to third parties.

Cryptocurrency exchanges engaged in staking must disclose all relevant risks and details concerning fees, minimum lock-up periods, unstaking processes, outage processes and custodial arrangements to their customers. Lastly, the providers must report on their staking activities to the SFC.

A similar circular was sent to SFC-regulated crypto fund operators, with the new rules being relevant to funds with more than 10% of their net asset value invested directly or indirectly in digital assets. Funds can only acquire virtual assets that are also directly available to the local public and rely on SFC-authorized platforms. Leveraged exposure is prohibited.

Funds can engage in staking if it is consistent with the fund’s objectives, while providing clear disclosure and robust controls. An investor notice and possibly shareholder approval may be required if staking implementation leads to material strategy or risk profile changes.

Hong Kong bets on Web3

During her recent speech, SFC’s Choi recognized that the Web3 space is still evolving and that “its full benefits will unfold in time, likely with twists and turns.” She cited the speculative industry of non-fungible tokens (NFTs) as a cautionary tale that justifies caution in the current regulatory approach:

“Therefore, rather than chasing every new spark, we believe in a pragmatic approach — strengthening the fundamentals and fostering a supportive ecosystem where Web3 can thrive in a sustainable manner.“

Related: Hong Kong remains an ‘open and vibrant market’ for crypto, says financial secretary

The official’s comments follow recent reports that cryptocurrency exchange Bybit announced the shutdown of its NFT marketplace as the market is running out of steam. The decision follows a similar decision by major NFT marketplace X2Y2 announced in late March.

The non-fungible token market is seeing a significant downturn. Daily NFT trading volume was over $18 million 364 days ago before Bybit’s announcements and stood at $5.34 million when the decision to shut down the platform was made public — a 70% fall.

When arguing why Web3 companies should choose Hong Kong as their headquarters, Choi pointed out that Hong Kong ranks third in the Global Financial Centres Index. Furthermore, local regulators have set clear guidelines for crypto industry firms, and Hong Kong provides easy access to Asian markets.

Hong Kong introduces crypto staking rules, reaffirms Web3 commitment

Global Financial Centres Index top 10. Source: LongFinance

In her closing statements, Choi said, “We stand today at the crossroads where traditional finance and the digital economy are converging to drive promising outcomes for our financial markets.” She added:

“The zero-to-one breakthrough has been made, and its future success would very much depend on how we nurture this convergence, that is, how we go from one to 100.“

Her statements echo Hong Kong’s financial technology sector, which has seen 250% growth since 2022. The SFC recently introduced a new roadmap to position the city as a global cryptocurrency hub.

The “ASPIRe” roadmap hopes to future-proof the local virtual asset ecosystem. It involves 12 initiatives spread across five broad categories, which include providing market access, optimizing compliance and frameworks and improving blockchain efficiency.

Magazine: Korea to lift corporate crypto ban, beware crypto mining HDs: Asia Express

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France to become first G7 nation to recognise Palestine as a state

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France to become first G7 nation to recognise Palestine as a state

Emmanuel Macron has said France will recognise Palestine as a state later this year.

The French president announced the major change of policy in a letter to the president of the Palestinian Authority, Mahmoud Abbas, which Mr Macron also published online on Thursday evening.

The French leader said he will make the formal announcement at the UN General Assembly, being held in September.

France will become the first G7 member to recognise a Palestinian state.

In his post explaining the decision, Mr Macron called for an immediate ceasefire in Gaza, the release of the hostages and for much more humanitarian aid to reach those in the territory.

But Israel’s defence minister has called the French decision “a disgrace and a surrender to terrorism”.

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Sky’s international correspondent John Sparks, reports on the children in Gaza who are experiencing malnutrition, one child wishes for ‘life to go back to how it was.’

The move heaps pressure on France’s allies such as the UK, and Sir Keir Starmer insisted tonight that he is “clear that statehood is the inalienable right of the Palestinian people”.

More on Emmanuel Macron

But the prime minister has resisted calls from within his own party to recognise Palestine immediately, as he views this as part of the peace process in Gaza.

Currently, half of the G20 recognise Palestine as a state, while nations including the UK, US, Germany and others do not.

But pressure has been growing on Sir Keir to change course, with senior Labour figures including the Mayor of London Sir Sadiq Khan publicly calling for a change in government policy.

Starmer: ‘We are witnessing a humanitarian catastrophe’

Just hours before Mr Macron’s announcement, Sir Keir said he would be holding an “emergency call” with the leaders of France and Germany over what he termed the “humanitarian catastrophe” happening in Gaza.

In some of the firmest language from the government yet, Sir Keir said that “the suffering and starvation unfolding in Gaza is unspeakable and indefensible”.

He went on to say that it has been “grave for some time”, but that it has now “reached new depths and continues to worsen”.

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The PM says that

Sir Keir said: “I will hold an emergency call with E3 partners tomorrow, where we will discuss what we can do urgently to stop the killing and get people the food they desperately need while pulling together all the steps necessary to build a lasting peace.”

The PM added that “we all agree” on the need for Israel to “change course and allow aid that is desperately needed to enter Gaza without delay”.

He wrote: “It is hard to see a hopeful future in such dark times. But I must reiterate my call for all sides to engage in good faith, and at pace, to bring about an immediate ceasefire and for Hamas to unconditionally release all hostages.”

Across the globe, more than 140 countries recognise Palestine as a state.

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