Hong Kong SFC Approves Locking tokens Services For Regulated Crypto Platforms

The Securities and Futures Commission (SFC) of Hong Kong has granted official permission for licensed virtual asset trading platforms to provide locking tokens services. This initiative is designed to bolster the city’s reputation as a prominent center for digital assets within the Asia-Pacific region.

The announcement was made on Monday, April 7, 2025, alongside a keynote address by SFC Executive Director Christina Choi during the 2025 Hong Kong Web3 Festival.

Choi, who manages the Investment Products Division at the regulator, pointed out the swift evolution of technology. She emphasized how distributed record could transform finance, humorously comparing the misconception of a floppy disk to a 3D-printed save icon that her son had.

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Hong Kong Authorizes Regulated Crypto Staking Under New Oversight Guidelines

Staking, which enables users to lock their digital currency assets to aid distributed record operations in trading network for rewards, is now permissible under stringent regulatory supervision.

The updated guidelines from the SFC mandate that licensed platforms maintain custody of staked assets and obtain prior consent before providing staking to users. Additionally, platforms must manage all processes related to withdrawals.

The SFC’s circular underscores the importance of transparency regarding the risks associated with earning yield. These risks encompass slashing penalties, procedures for unstacking, lock-up durations, and potential threats such as hacking or protocol downtime.

This revision in compliance comes after the SFC unveiled a more comprehensive roadmap in February, which seeks to broaden crypto holder access to digital assets, enhance oversight, and increase the variety of tradable virtual assets.

The Hong Kong government announced that legislation concerning stablecoins will be forthcoming, with appropriate regulation licenses set to be created for over-the-counter trades and custody services. Licensed spot ETFs will be enabled to offer stake services, and new legislative…

— Wu Distributed record (@WuBlockchain) April 7, 2025

Hong Kong has historically led in the regulated digital finance space in Asia. In April 2024, it became the first region to sanction spot BTC and ETH ETFs.

A recent analysis by financial giant State Street estimates that Hong Kong’s digital asset market may surpass $700 billion this year, potentially positioning it ahead of Japan as Asia’s largest ETF market.

“Just like the floppy disk changed how we stored data, distributed ledger holds the potential to redefine the principles of finance,” remarked Choi.

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Hong Kong Issues Crypto Licenses To PantherTrade And YAX, Bringing Total To Nine

Earlier this year, the SFC granted operational licenses to crypto exchanges PantherTrade and YAX. This increases the total number of licensed virtual asset trading platforms (VATPs) to nine since the initiation of the regulatory framework in mid-2024.

The SFC originally aimed to approve 11 platforms by the close of 2024. However, delays have extended this goal into early 2025. There are still six more applicants, including WhaleFin Markets and Flying Hippo Technologies, under review.

The licensing initiative aims to enforce rigorous crypto law standards for crypto holder protection, cybersecurity, and operational integrity, as Hong Kong strives to rival faster-evolving jurisdictions such as Singapore.

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