In the promising transformation of the digital assets terrain, Hong Kong’s Securities and Futures Commission (SFC) has approved the regulatory guidelines for VATPS (Virtual Asset Trading and Payment Services). It aims to introduce secure staking to its clients.
This step is like achieving a huge milestone in the integration of traditional financial governance with the everyday evolving world of decentralized finance (DeFi). This approval ensures the VATPS stake.
It’s a process where users can lock their cryptocurrencies to support blockchain operations. This is how they can earn a reward under its secure framework. This framework prioritizes security, transparency, and compliance.
This development was uncovered on April 7, 2025. This is a step forward towards the increased scope of visual asset services with investor protection and transparency as priorities.
Staking is a process central to blockchain networks. These networks work and operate on Proof-of-Stake (PoS) protocols. These protocols involve Ethereum, which allows participants to lock up their tokens to validate transactions and earn rewards.
The SFC’s decision highlights its commitment to promoting innovation in Hong Kong’s burgeoning digital economy. These innovations aim to safeguard users’ money.
Julia Leung, CEO of SFC, emphasized that clients’ asset safety remains dominant in any new crypto services introduced under the commission’s sight.”
The new regulations’ implementation of VATP for internal controls to minimize operational risks and errors. Platforms must retain control over tools for different purposes, including the withdrawal of client assets and the prohibition of third-party custodians.
Moreover, if outsourcing is necessary for any staking process, then VAPTs will conduct due diligence and obtain the approvals primarily from the SFC. These measures aim to ensure transparency and accountability in client asset handling.
To enhance transparency, VATPs must disclose information about using their staking services. This includes the comprehensive details on supported assets, factors of risks, lockup periods, charges involved, unstaking procedures, and contractual terms.
The main goal of these measures is to disclose to clients clear information about potential risks and vulnerabilities. They can be blockchain errors, risks of hacking, or validator inactivity.
SFC has introduced additional guidelines for EFTs involved in staking activities. Fund managers should ensure that staking aligns well with the fund’s objectives and manage the risks associated effectively.
They are required to disclose the details of the proportion of assets staked. This includes funds, risks, returns, and expenses in the fund documents. If staking alters the fund’s risk profile or investment strategy, managers should report it to investors priorly to deciding the stakeholders’ approval.
The approval is a strategic win for VATPS. The platform is exceeding its crypto services, and staking is expected to attract a new wave of institutional and retail investors.
Estimated that earlier VATPS could capture 15% of the global staking market in two years. It’s because of its reputation and security frameworks.
VATPS CEO Marcus Renard said, “This is not just a product but a game changer for our clients. We are offering them a way to earn succumbs without compromising safety and regulatory adherence.”
The regulatory frameworks imitate Hong Kong’s determination to establish itself as a global leader in virtual asset regulations.
SFC seeks to balance innovation with investor protection by permitting licensed exchanges and funds staking services under strict conditions.
This approach varies from Singapore’s ban on retail staking in 2023. This is an ongoing restriction by the U.S. Securities and Exchange Commission (SEC).
Staking landscape is competitive, and challenges remain. Coinbase, Binance, and Kraken are established players and are already dominating the space.
VATPS will need to create a difference through superior technology, competitive rates, and exceptional transparency. Additionally, regulatory uncertainties in other regions can hinder its global adaptation. Some countries are cautious of staking due to its security offering classifications.
Despite these hurdles and challenges, the SFS approval must meet with optimism. Market reaction was positive. VATPS’s native token (VTP) is rolling 12% after the announcement.
Crypto advocates suggest regulated staking can bridge the gap between traditional finance and DeFi. This will attract financial institutions to enter without the compliance concerns.
Blockchain consultant Rahul Mehta said, “This is exactly the kind of development the industry needs. It legitimates staking as a financial service instead of a speculative gamble.”
The guidelines also address the liquidity risks for authorized asset funds involved in staking. These funds are now required to be staked only through licensed VATPs.
Authorized institutions can provide while adhering to an enforced cap or staked asset. These measures provide staking opportunities to investors on demand.
SFS and VATPS are expected to collaborate on innovations further. This can include the integration of staking with traditional banking services. Talks are already on it’s way that allows clients to stake directly from their savings accounts.
This blurs the conventional digital finance. Such initiatives can provide further adoption of crypto, especially among investors.
SFS’s approval of VATPS’s staking services is a major step towards the crypto industry. Combining regulatory innovation with cutting-edge technology, this partnership set new standards and paths forward to secure and compliant staking.
This decision can serve as a blueprint for digital assets integrated with the global finance system, safety, and sustainability at scale.
The introduction of these regulations by Hong Kong not only strengthens its hub for digital assets but also sets a precedent for other rules, how to regulate blockchain with technological innovations.
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