Hong Kong’s Securities and Futures Commission (SFC) has officially rolled out a new framework allowing licensed Virtual Asset Trading Platforms (VATPs) and exchange-traded funds (ETFs) to offer staking services. Hong Kong made its April 7 announcement to move toward becoming a digital finance leader worldwide with new crypto regulations.

Users on PoS Ethereum get rewards through staking when they assign their tokens for splitting transactions. The SFC attempts to let stakeholders earn income through cryptocurrency investments under comprehensive rules.

SFC Approves Staking for ETFs, VATPs

SFC Chief Executive Officer Julia Leung stated that by updating their guidelines they aim to promote market advancement within protective conditions for consumers. According to Ms. Leung, the main goal is to protect customer assets while helping virtual asset services grow.

The new standards place stringent regulations on operational quality and openness so they remain essential in Hong Kong’s developing sector. The fresh rules bind licensed platforms to implement advanced safety systems to handle work challenges and control self-gain issues.

The SFC stops businesses from placing their customer virtual assets with outside storage providers. Platform operators must keep in-house all systems that allow clients to deposit and withdraw digital assets.

ETFs Allowed to Stake Under Regulation

VATPs that provide staking services need to follow disclosure rules to keep their customers safe. Each client needs to get the full information on supported tokens plus learn how to avoid risks and unlock or return their investment.

When VATPs use outside staking service providers, they still need the SFC’s approval under its thorough verification process. The SFC now allows staking of crypto-linked ETFs. These funds may engage in staking but all such activities must go through either SFC-licensed VATPs or authorized institutions.

Fund managers must demonstrate staking meets their ETF’s investment goal plan and monitor related risks, explaining its activities to investors in official reporting. Managers must inform fund shareholders on any changes to their investment plan that result from staking and ask for formal approval when needed.

The new rules show that Hong Kong wants to become a worldwide crypto center while tightening its regulatory grip on financial assets. Hong Kong’s investor protection measures provide other countries with a model to create effective crypto market regulations.

As Hong Kong adds staking to its regulated financial services, it positions DeFi for superior integration under controlled regulations.