Hong Kong’s Securities Regulator, Securities and Futures Commission (SFC), laid out new guidance that would provide licensed crypto exchanges and funds to offer efforts in the city.

Pooring offers crypto holders a way to put their digital assets at work and earn passive income without selling them. Setting is integrated into proof of rod (POS) network as it provides security and immutability.

In a press release on Monday, Securities and Futures Commission (SFC) recognized the double role that can play, which improves blockchain network security and provides regulated dividend -generating opportunities for investors as it continues to implement its wider strategy to grow Hong Kong’s digital asset sector through its “aspire” -trekkenvær.

“Expansion of the package of regulated services and products is crucial to maintaining the healthy progress of Hong Kong’s virtual activist ecosystem,” Julia Leung, SFC CEO, said in a release. “But the expansion must be carried out in a regulated environment where the safety of the client’s virtual assets remains front and middle.”

In a circular that explains the rules of action, SFC said that virtual asset trading platforms (VATP), which is what the regulator calls licensed exchanges must retain full control over clients’ assets that explicitly prohibit outsourcing of efforts to a third party.

Platforms are also required to transparent to transparent all associated risks, including potential vulnerabilities such as blockchain errors, hacking or validatorin activity.

According to the rules, VATPS must clearly inform clients about the processes involved, fees, minimum locking durations and events for business continuity during disturbance.

Authorized virtual asset funds meanwhile have only mandated to be included via licensed platforms or authorized institutions, with a enforced cap to control liquidity risks, which further emphasizes the controller’s cautious yet supportive approach.

This is in contrast to Singapore, Hong Kong’s rival financial center in the region, which banned retail stacks in 2023, with reference to the need for “investor protection.”

The US Securities and Exchange Commission (SEC) continues to limit efforts through enforcement measures, although it faces growing calls from a top species group of senators to facilitate its attitude.

Meanwhile, several states, including most recently Illinois, have fallen by putting litigation against Coinbase, which was first affected by several litigation in 2023.