Hong Kong introduces crypto staking rules, reaffirms Web3 commitment

Published

2 months ago

April 7, 2025

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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.

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.“

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.

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

Politics

‘No doubt’ UK will spend 3% of GDP on defence in next parliament, defence secretary says

Published

2 hours ago

May 31, 2025

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'No doubt' UK will spend 3% of GDP on defence in next parliament, defence secretary says

There is “no doubt” the UK “will spend 3% of our GDP on defence” in the next parliament, the defence secretary has said.

John Healey’s comments come ahead of the publication of the government’s Strategic Defence Review (SDR) on Monday.

This is an assessment of the state of the armed forces, the threats facing the UK, and the military transformation required to meet them.

Prime Minister Sir Keir Starmer has previously set out a “clear ambition” to raise defence spending to 3% in the next parliament “subject to economic and fiscal conditions”.

Mr Healey has now told The Times newspaper there is a “certain decade of rising defence spending” to come, adding that this commitment “allows us to plan for the long term. It allows us to deal with the pressures.”

A government source insisted the defence secretary was “expressing an opinion, which is that he has full confidence that the government will be able to deliver on its ambition”, rather than making a new commitment.

The UK currently spends 2.3% of GDP on defence, with Sir Keir announcing plans to increase that to 2.5% by 2027 in February.

This followed mounting pressure from the White House for European nations to do more to take on responsibility for their own security and the defence of Ukraine.

The 2.3% to 2.5% increase is being paid for by controversial cuts to the international aid budget, but there are big questions over where the funding for a 3% rise would be found, given the tight state of government finances.

While a commitment will help underpin the planning assumptions made in the SDR, there is of course no guarantee a Labour government would still be in power during the next parliament to have to fulfil that pledge.

A statement from the Ministry of Defence makes it clear that the official government position has not changed in line with the defence secretary’s comments.

The statement reads: “This government has announced the largest sustained increase to defence spending since the end of the Cold War – 2.5% by 2027 and 3% in the next parliament when fiscal and economic conditions allow, including an extra £5bn this financial year.

“The SDR will rightly set the vision for how that uplift will be spent, including new capabilities to put us at the leading edge of innovation in NATO, investment in our people and making defence an engine for growth across the UK – making Britain more secure at home and strong abroad.”

Sir Keir commissioned the review shortly after taking office in July 2024. It is being led by Lord Robertson, a former Labour defence secretary and NATO secretary general.

The Ministry of Defence has already trailed a number of announcements as part of the review, including plans for a new Cyber and Electromagnetic Command and a £1bn battlefield system known as the Digital Targeting Web, which we’re told will “better connect armed forces weapons systems and allow battlefield decisions for targeting enemy threats to be made and executed faster”.

On Saturday, the defence secretary announced a £1.5bn investment to tackle damp, mould and make other improvements to poor quality military housing in a bid to improve recruitment and retention.

Mr Healey pledged to “turn round what has been a national scandal for decades”, with 8,000 military family homes currently unfit for habitation.

He said: “The Strategic Defence Review, in the broad, will recognise that the fact that the world is changing, threats are increasing.

“In this new era of threat, we need a new era for defence and so the Strategic Defence Review will be the vision and direction for the way that we’ve got to strengthen our armed forces to make us more secure at home, stronger abroad, but also learn the lessons from Ukraine as well.

“So an armed forces that can be more capable of innovation more quickly, stronger to deter the threats that we face and always with people at the heart of our forces… which is why the housing commitments that we make through this strategic defence review are so important for the future.”