Staking is a popular activity within the virtual assets ("VA") industry and is an important function that virtual asset trading platform operators ("VATP Operator") provide to their clients.
However, as staking has characteristics that are similar to the operation of a collective investment fund (CIS), the Hong Kong Securities and Futures Commission ("SFC") treated staking cautiously, and considered that staking may constitute unauthorised CISs. This approach was also incorporated into the different VA-related guidelines published by the SFC, including the Guidelines for VATP Operators (the "VATP Guidelines").
Due to the high demand in staking and the SFC's recognition of the potential benefits of staking, where it potentially enhances the security of blockchain networks, on 7 April 2025, the SFC changed its cautious approach and published the Circular on staking services provided by virtual asset trading platforms (the "Staking Circular"), which VATP Operators are now allowed to provide staking as a service subject to a set of terms and conditions (the "Staking T&Cs") that are annexed to the Staking Circular.
This client alert summarises the key requirements in the Staking Circular and the Staking T&Cs.
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