Opinion by: Alvin Kan, chief operating officer of Bitget Wallet

Here we go again: A top centralized crypto exchange (CEX) was hacked, this time likely for the largest sum in humanity’s history. We were lucky to avoid the worst — platform collapse and devastating consequences for the industry. The incident reminded us again that even the strongest market players are not invincible. 

CEXs’ freedom to manage customer funds comes with risks, reminding users that good old non-custodial storage is still the safest. With recent advances in security features, wallets safeguard coins and help users safely make the most of their crypto.

Golden rules never rust

After the $1.5 billion Bybit hack, things settled down quite quickly. If the platform didn’t keep reserves of 1:1 for client funds, however, the hack could have dire consequences for the entire industry. When FTX’s liquidity problems surfaced in 2022, a bank run killed the platform in days, and billions of repayments are only just starting.

Historically, CEXs have been a primary target for hackers. Between 2012 and 2023, centralized exchanges fell victim to 118 hacks, losing almost $11 billion. This is 11 times more than money directly stolen from blockchain networks and cryptocurrency wallets. Again and again, we see how vulnerable crypto market titans can be. The golden “not your keys, not your Bitcoin” rule remains highly relevant.

Making a centralized crypto exchange deposit means delegating the storage of your money. CEXs keep all private keys and hence have complete control over customers’ funds. Besides a smooth trading experience, this entails a few unpleasant consequences. 

First, centralized platforms store substantial amounts in a few wallets, making them a frequent target for hackers. CEXs use cold wallets and multisig transactions, which is supposed to be an ultimately secure method. This framework, however, relies on third-party infrastructure to merge signatures, and these systems turned out to be vulnerable. When traders let CEXs keep their private keys, there’s a chance they will lose all their funds one day for reasons they entirely cannot control. 

In addition to hacks, there are many other ways we risk our funds when delegating custody. Centralized exchanges can freeze accounts for sophisticated legal reasons, impose withdrawal limits and mismanage funds, leading to bankruptcy. History suggests these things often happen unexpectedly — and the only way to be prepared is to take responsibility for storing our money in our own hands. 

Not just encryption

When you store crypto in a non-custodial wallet, your private keys reside on your device in an encrypted form. You have complete control over your funds, unlike centralized platforms where you have none. 

Self-custody is not zero-risk. You can engage with any decentralized finance (DeFi) protocol or swap any — even unlisted — coins. This freedom comes with great responsibility: DeFi platforms have become a more frequent attack target over the last few years. Developers often focus on rapid growth, leaving security measures behind.

Today’s wallets, however, support users’ freedom, giving them more tools to protect their funds than ever before. These start with a few layers of encryption, making sure no one but you can reach your private keys. A passcode often verifies outgoing transactions and decentralized application (DApp) permissions, so there’s dual protection for daily wallet activities. 

Recent: Hardware wallet Ledger helps competitor Trezor resolve security vulnerability

Some wallets even eliminate the need to remember seed phrases while keeping them decentralized. If you set up a multiparty computation wallet, private keys are spread across multiple devices. There’s no risk of single-point failure, and you can recover access to coins even if one wallet keeper is lost. 

Security measures today have gone even further, making “storage-only” wallets a thing of the past. Besides private key encryption, wallets detect risks around the crypto landscape, helping users limit interactions with malicious projects. Dedicated systems detect phishing attacks, malicious addresses and fraudulent contracts, displaying risk alerts for users and helping them prevent theft. 

Sometimes, users grant excessive permissions to DApps, allowing indefinite access to their funds, and then forget they did it. Some wallets provide simple tools to review previously given permissions and revoke access, especially if the system flags them as risky. 

Responsible wallets also constantly undergo independent security audits by multiple parties, checking their core code and additional features such as token swap tools, NFT marketplaces, etc. Some platforms maintain a protection fund to reimburse users in case of a security incident. Finally, some also educate users on how to protect themselves from scams. 

Good non-custodial wallets don’t just store funds well. They help you use them safely, making the most of your coins.

Massive amounts stored in CEXs’ wallets attract hackers like a flame lures moths. One solution is to spread assets across even more wallets so that compromising one won’t put the entire system at risk. Another one is for users to minimize reliance on centralized platforms and regain control of their funds, taking advantage of wallets’ smart security features.

Opinion by: Alvin Kan, chief operating officer of Bitget Wallet.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin (BTC) sought a relief rally into the April 7 Wall Street open as US stocks rebounded from a 4%+ loss.

BTC/USD 1-hour chart. Source: Cointelegraph/TradingView

Bitcoin joins US stocks in relief rally

Data from Cointelegraph Markets Pro and TradingView showed the area around $80,000 forming a focus for BTC/USD after the pair hit five-month lows.

The fallout from US trade tariffs continued to ricochet across global markets, with Asia stocks closing the day with considerable losses.

At the same time, reports of a potential 90-day pause in the tariffs going live, against a background of negotiations with over 50 US trading partners, helped pare losses in futures markets ahead of the open and allowed the S&P 500 and Nasdaq Composite Index to avert a ”Black Monday” 1987-style implosion.

“Nasdaq futures were down nearly -7% at their lowest point last night,” trading resource The Kobeissi Letter noted in part of ongoing coverage on X.

Kobeissi nonetheless acknowledged that the S&P 500 had fallen more than 20% from its February all-time highs, opening in “bear market territory” for the first time since 2022.

S&P 500 1-day chart. Source: Cointelegraph/TradingView

Continuing, trading firm QCP Capital called international engagement over tariffs “remarkable.”

“Yet as the world scrambles to secure a seat at the table, markets are likely to remain on edge,” it concluded in its latest bulletin to Telegram channel subscribers. 

“The president, showing no signs of backing down, remarked that he doesn’t want stocks to fall, ‘but sometimes you have to take medicine.’ With confidence and the credibility of the U.S. economy hanging in the balance, the coming days could prove too bitter a pill for global markets, and for Trump himself, if meaningful progress isn’t made before Wednesday.”

Fed target rate probability comparison for May FOMC meeting. Source: CME Group

Data from CME Group’s FedWatch Tool continued to show shifting market expectations on interest rate cuts by the Federal Reserve, with the upcoming meeting in June now favored as a deadline.

BTC price safety net extends to $69,000

Bitcoin meanwhile attempted to solidify support in the mid-$70,000 range, having come within spitting distance of old all-time highs from March 2024.

Related: Black Monday 2.0? 5 things to know in Bitcoin this week

In its latest observations, onchain analytics firm Glassnode revealed the lows coinciding with the realized price of large tranches of the BTC supply.

“For now, $BTC seems to have found support at $74K. This aligns with the first major supply cluster below $80K – over 50K $BTC at $74.2K,” it reported on X. 

“This level is mostly held by investors who had been active for five months, steadily raising their cost basis until 10 March, after which they’ve remained dormant.”

Bitcoin supply cost basis data. Source: Glassnode/X

Glassnode added that between the lows and $70,000 was another 175,000 BTC of “cost basis clusters.”

“The single largest level within this range is $71.6k, holding ~41k $BTC. The next more substantial support sits at $69.9k, where ~68k $BTC are held,” it confirmed.

As Cointelegraph reported, $69,000 and the area nearby is seen as a reliable long-term BTC price support zone which is statistically unlikely to break down.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

More than 90% of the voting creditors of the Indian crypto exchange WazirX voted in favor of the platform’s post-hack restructuring plan.

According to an April 7 announcement, 93.1% of voting creditors who hold 94.6% of the value voted in favor of the plan. All creditors who held crypto balances on the platform were eligible to vote on the Kroll Issuer Services platform from March 19 until March 28.

WazirX co-founder and CEO Nischal Shetty told Cointelegraph that with the plan approved, stolen asset recovery is “a primary focus.” Still, he pointed to profit sharing as a further measure that the firm hopes to use to compensate its users.

The news follows early February reports that WazirX had warned that repayments from the $235 million hack against it could be delayed until 2030 if creditors didn’t approve its proposed restructuring plan. At the time, the platform said that creditors might need to endure “unclear and potentially extended timelines” if the plan wasn’t approved.

WazirX said creditors could face repayment delays if they voted against the restructuring plan. Source: WazirX

Shetty celebrated the vote results in a subsequent X post. He wrote:

“The people have spoken. We will work hard on rebuilding and creating value for everyone.”

Related: CoinSwitch launches $70M recovery fund for WazirX hack victims

The plan for repaying creditors

Shetty described the result as “an important milestone in the recovery process” that “reflects a shared belief in the proposed restructuring plan.” The plan in question was developed under the supervision of Singapore’s legal system and announced in January, it entails WazirX holding liquid assets amounting to $566.4 million USDt — while the claims amount to $546.5 million USDT.

The exchange also released recovery tokens to settle outstanding claims, which allows creditors to benefit from future platform operations and asset recovery. WazirX promised to return funds through token distributions that could yield 75% to 80% of the value of users’ account balances at the time of the cyberattack.

The rest would be represented by recovery tokens, which will be periodically repurchased using profits generated from platform operations and a proposed decentralized exchange (DEX). Plans to launch the DEX were unveiled in November 2024, when Shetty said that it will help prevent hack losses from happening again:

“The best thing is that you’ll be able to self-custody your assets here — your assets will be completely under your control — and you can freely trade or do what you want with your assets.”

Shetty also told Cointelegraph that the DEX will aim to be much simpler to interact with than the usual experience of decentralized trading platforms. He said, “Our goal is to make it on par with our CEX in terms of ease of operating.”

Related: Binance, WazirX among crypto firms evading taxes in India, says gov’t

A North Korea-linked hack

WazirX lost $234.9 million of digital assets in a Safe Multisig wallet in mid-July 2024. The attack was attributed to North Korean state actors and unfolded with alarming speed and precision, with many speculating on its impact on the broader crypto industry in India.

Shetty told Cointelegraph that — to prevent future hacks — WazirX has moved to BitGo and Zodia for crypto custody, promising “enhanced protection of funds.” The partnerships also reportedly include insurance.

Hacks continue to be a significant issue for the cryptocurrency industry. According to recent reports, over $2 billion was lost to cryptocurrency hacks in the first quarter of 2025 alone, with nearly $1.63 billion being lost to just access control exploits.

This is also the third quarter in a row that — much like in WazirX’s case — the top exploit was a multisignature-related event. Hacken shared a key lesson on the subject:

“Securing digital assets requires more than just secure on-chain code — the entire infrastructure, from front-end interfaces to internal processes, must be equally hardened, as all it takes is a single weak spot to wreck the entire system.“

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Michael Saylor’s firm Strategy, the world’s largest publicly listed corporate holder of Bitcoin, did not add to its BTC holdings last week as the cryptocurrency’s price dropped below $87,000.

In a filing with the US Securities and Exchange Commission on April 7, Strategy announced it made no Bitcoin (BTC) purchases during the week of March 31 to April 6.

The decision followed a week of heightened market volatility, with BTC surging to as high as $87,000 on April 2 after starting the week at around $82,000, according to data from CoinGecko.

Bitcoin price from March 31, 2025, to April 6, 2025. Source: CoinGecko

BTC fell below $80,000 on April 6, a significant discount from the average BTC price of Strategy’s previous 22,000 BTC purchase announced on March 31.

Strategy reports unrealized loss of $5.91 billion on digital assets in Q1

In the period from March 31 to April 6, Strategy also did not sell any shares of class A common stock, which it tends to use for financing its Bitcoin buys, the filing stated.

As of April 7, Strategy held an aggregate amount of 528,185 Bitcoin bought at $35.6 billion, or at an average price of 67,458 per BTC, it added.

An excerpt from Strategy’s Form 8-K report. Source: SEC

“Our unrealized loss on digital assets for the quarter ended March 31, 2025, was $5.91 billion, which we expect will result in a net loss for the quarter ended March 31, 2025, partially offset by a related income tax benefit of $1.69 billion,” the filing added.

“Bitcoin is most volatile because it is most useful”

While Strategy avoided buying Bitcoin last week, its co-founder and former CEO, Saylor, continued posting about the crypto asset’s superiority on social media.

“Bitcoin is most volatile because it is most useful,” Saylor wrote in an X post on April 3, soon after BTC tumbled from the intra-week high of $87,100 on April 2 below $82,000, following the tariffs announcement by US President Donald Trump.

Related: Has Michael Saylor’s Strategy built a house of cards?

Source: Michael Saylor

“Today’s market reaction to tariffs is a reminder: inflation is just the tip of the iceberg,” Saylor wrote in another X post.

“Capital faces dilution from taxes, regulation, competition, obsolescence, and unforeseen events. Bitcoin offers resilience in a world full of hidden risks,” he added.

Magazine: New ‘MemeStrategy’ Bitcoin firm by 9GAG, jailed CEO’s $3.5M bonus: Asia Express

A wallet linked to the $40 million ZKasino scam lost more than $27 million after a leveraged position was liquidated, marking what some in the crypto community are calling a dose of karmic justice.

ZKasino launched in April 2024, luring investor capital by promising an airdrop of its native token to users who bridged Ether (ETH) to the platform.

However, instead of returning the funds, ZKasino transferred around $33 million in user ETH to the staking protocol Lido Finance.

Nearly a year later, the wallet behind the alleged exploit has been liquidated for $27.1 million after ETH’s price declined sharply, according to blockchain analytics platform Onchain Lens.

Source: Onchain Lens

“A scammer gets a dose of karma,” Onchain Lens wrote in an April 7 X post, adding:

“The ZkCasino scammer, who scammed $40M+, closed its $ETH (20x) position on #Hyperliquid, faced a total loss of $27.1M.”

Following the liquidation, affected users appear no closer to recovering their funds.

Related: Trump’s Liberation Day: ‘Climax of uncertainty’ before crypto market recovery

The liquidation came after record-breaking sell-offs in traditional equity markets that led to a crypto market correction; ETH’s price fell to a nearly two-year low of $1,480, last seen in May 2023.

Source: Lookonchain

Earlier on April 7, an unidentified crypto whale was forced to make a $14 million emergency deposit to avoid an over $340 million Ether liquidation.

Related: Smart money still hunting for memecoins despite end of ‘supercycle’

The ZKasino exit scam

After being accused of running an exit scam, ZKasino said it initiated a 72-hour process to return funds to investors a month after transferring the $30 million of user funds to Lido.

“We are now initiating the 2-step bridge back process in which bridgers can sign up and bridge back their ETH at a 1:1 ratio,” ZKasino said in a May 28, 2024, Medium post, adding that the team hasn’t given up on the project.

However, any investors wanting their ETH back will forfeit any allocated ZKAS tokens and the remaining 14 months of ZKAS releases, ZKasino said.

On April 29, 2024, Dutch authorities arrested one of the people suspected to be responsible for the “rug pull.” A few days later, all bridged ETH was returned to the ZKasino multisig wallet as Derivative Monke publicly denied the rug pull allegations on X.

However, ZKasino still hasn’t returned the ETH nearly a year after the incident.

“Unfortunately, everyone who sent the ZKAS back has not heard anything from them yet,” one user, who communicated on the condition that his identity not be revealed, told Cointelegraph in August 2024.

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US federal agencies are expected to disclose their cryptocurrency holdings to the Department of the Treasury by April 7, following an executive order signed by President Donald Trump earlier this year.

Citing an unidentified White House official, journalist Eleanor Terrett reported that the deadline for federal agencies to report their crypto holdings to Treasury Secretary Scott Bessent is April 7.

The disclosures will remain confidential for now. “Unclear as of now if and when the findings could be made public,” Terrett wrote.

Source: Eleanor Terret

Crypto disclosure follows Bitcoin Reserve establishment

The reporting requirement followed an executive order signed on March 7 that directed the creation of a Strategic Bitcoin Reserve and a broader Digital Asset Stockpile. The Bitcoin (BTC) reserve will be seeded with BTC forfeited to federal agencies through civil or criminal asset seizures.

White House AI and crypto czar David Sacks described the reserve as a “digital Fort Knox for the cryptocurrency,” saying that the US will not sell any BTC held in the reserve. “It will be kept as a store of value,” Sacks added.

Sacks previously lamented the US government’s sales of 195,000 BTC for $366 million. The official said the BTC sold by the US government could’ve gone for billions if it had only held on to the assets. 

The reserve will initially be seeded by the BTC kept by the Treasury, while the other federal agencies will “evaluate their legal authority” to transfer their BTC into the reserve. 

Regarding the digital asset stockpile, Sacks said it would promote “responsible stewardship” of the government’s crypto assets under the Treasury. This includes potential sales from the stockpiles. 

On March 2, Trump said that the crypto reserve would include assets like XRP (XRP), Solana (SOL) and Cardano (ADA). The president later added Ether (ETH) and Bitcoin (BTC) to his crypto reserves list. 

Related: 10-year Treasury yield falls to 4% as DXY softens — Is it time to buy the Bitcoin price dip?

Crypto plunges as Trump tariffs shock global stocks

While Trump’s election may have positively impacted crypto markets, the US president’s next move has resulted in a market crash. 

On April 5, the Trump administration hit all countries with a 10% tariff. Some countries were given higher rates, including China at 34% and Japan at 24%. The European Union was also hit with a 20% tariff.  

Following Trump’s move, the overall crypto market capitalization declined by over 8%, slipping to $2.5 trillion. 

Magazine: Financial nihilism in crypto is over — It’s time to dream big again

The Mantra blockchain network has launched a $108,888,888 ecosystem fund aimed at accelerating the growth of startups focused on real-world asset (RWA) tokenization and decentralized finance (DeFi), amid rising demand for stable, asset-backed digital products.

Mantra, a layer-1 (L1) blockchain built for tokenized RWAs, launched the Mantra Ecosystem Fund (MEF) to accelerate the growth and adoption of projects and startups building on its network, according to an April 7 announcement shared with Cointelegraph.

Mantra said it will deploy the capital over the next four years among “high-potential blockchain projects” worldwide, with investment opportunities sourced through Mantra’s network of partners. The fund’s backers include a wide range of institutional partners including Laser Digital, Shorooq, Brevan Howard Digital, Valor Capital, Three Point Capital and Amber Group.

Related: 0G Foundation launches $88M fund for AI-powered DeFi agents

Mantra CEO John Patrick Mullin said the fund will operate an “open-arms policy, welcoming projects at any developmental stage globally with a particular focus on RWA’s and DeFi.” Mullin told Cointelegraph:

“The MEF thesis is to invest in top-tier teams building RWA and DeFi applications, as well as complimentary infrastructure, that will both directly and indirectly support the broader ecosystem.”

Mantra aims to become the underlying infrastructure layer for tokenized asset issues worldwide, Mullin said.

Source: Mantra

The launch of the fund comes a month after Mantra became the first DeFi platform to obtain a virtual asset service provider (VASP) license under Dubai’s Virtual Assets Regulatory Authority (VARA).

Related: Stablecoin rules needed in US before crypto tax reform, experts say

Investor demand grows for RWAs

The timing of the fund’s launch aligns with growing institutional interest in RWAs, which are seen by some as a hedge against crypto market volatility and broader economic uncertainty.

Global fears and uncertainty around US President Donald Trump’s tariffs have impacted investor sentiment across markets.

Despite a broader market slump triggered by US tariff-related concerns, the value of tokenized RWAs recently surged to a record high. According to data from RWA.xyz, total RWA market capitalization reached more than $19.6 billion as of early April, up from $17 billion in early February.

RWA global market dashboard. Source: RWA.xyz

Industry watchers previously told Cointelegraph that Bitcoin’s lack of upside momentum may drive RWAs to a $50 billion all-time high before the end of 2025.

The world’s largest asset manager, BlackRock, has also signaled support for the RWA space.

BlackRock BUIDL capital deployed by chain. Source: Token Terminal, Leon Waidmann

BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) saw an over three-fold increase in the three weeks leading up to March 26, from $615 million to $1.87 billion.

Magazine: Financial nihilism in crypto is over — It’s time to dream big again

Cryptocurrency exchange-traded products (ETPs) saw renewed outflows last week, with $240 million in investor capital pulled, according to an April 7 report from digital asset manager CoinShares.

The outflows reversed two consecutive weeks of inflows that totaled $870 million, leaving total digital asset ETP holdings at about $133 billion, CoinShares reported.

The new outflows likely reflect investor caution in response to global trade tariffs imposed by the United States and concerns over their potential threat to global economic growth, CoinShares head of research James Butterfill said.

Weekly crypto ETP flows since late 2024. Source: CoinShares

Bitcoin ETPs flip monthly total negative

Bitcoin (BTC) ETPs led the downturn, with $207 million in weekly outflows. As a result, monthly flows turned negative for the first time this year, with $138 million in net outflows in the past 30 days.

Despite monthly outflows turning red, Bitcoin ETPs still maintain a significant amount of inflows year-to-date, totaling $1.3 billion, according to CoinShares data.

Flows by asset (in millions of US dollars). Source: CoinShares

Ether (ETH)-linked ETPs also saw $38 million in weekly outflows but continued to hold $279 million in YTD inflows.

Multi-asset ETPs and short Bitcoin ETPs saw $144 million and $26 billion in YTD outflows, respectively, despite minor inflows last week.

Grayscale leads ETP outflows

Cryptocurrency ETPs by major crypto investment firm Grayscale Investments led the losses among issuers last week, with $95 million withdrawn from its products.

Grayscale’s year-to-date outflows now stand at $1.4 billion, the highest among all ETP providers tracked, according to CoinShares data.

Related: Grayscale launches two new Bitcoin outcome-oriented products

Flows by issuer (in millions of US dollars). Source: CoinShares

Meanwhile, iShares ETFs by BlackRock still maintained $3.2 billion in YTD inflows after seeing $56 million in outflows last week.

Crypto ETPs by ProShares and ARK Invest are the only two other major issuers that still have inflows YTD, amounting to $398 million and $146 million, respectively.

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Cryptocurrency exchange-traded products (ETPs) saw renewed outflows last week, with $240 million in investor capital pulled, according to an April 7 report from digital asset manager CoinShares.

The outflows reversed two consecutive weeks of inflows that totaled $870 million, leaving total digital asset ETP holdings at about $133 billion, CoinShares reported.

The new outflows likely reflect investor caution in response to global trade tariffs imposed by the United States and concerns over their potential threat to global economic growth, CoinShares head of research James Butterfill said.

Weekly crypto ETP flows since late 2024. Source: CoinShares

Bitcoin ETPs flip monthly total negative

Bitcoin (BTC) ETPs led the downturn, with $207 million in weekly outflows. As a result, monthly flows turned negative for the first time this year, with $138 million in net outflows in the past 30 days.

Despite monthly outflows turning red, Bitcoin ETPs still maintain a significant amount of inflows year-to-date, totaling $1.3 billion, according to CoinShares data.

Flows by asset (in millions of US dollars). Source: CoinShares

Ether (ETH)-linked ETPs also saw $38 million in weekly outflows but continued to hold $279 million in YTD inflows.

Multi-asset ETPs and short Bitcoin ETPs saw $144 million and $26 billion in YTD outflows, respectively, despite minor inflows last week.

Grayscale leads ETP outflows

Cryptocurrency ETPs by major crypto investment firm Grayscale Investments led the losses among issuers last week, with $95 million withdrawn from its products.

Grayscale’s year-to-date outflows now stand at $1.4 billion, the highest among all ETP providers tracked, according to CoinShares data.

Related: Grayscale launches two new Bitcoin outcome-oriented products

Flows by issuer (in millions of US dollars). Source: CoinShares

Meanwhile, iShares ETFs by BlackRock still maintained $3.2 billion in YTD inflows after seeing $56 million in outflows last week.

Crypto ETPs by ProShares and ARK Invest are the only two other major issuers that still have inflows YTD, amounting to $398 million and $146 million, respectively.

Magazine: Bitcoin heading to $70K soon? Crypto baller funds SpaceX flight: Hodler’s Digest, March 30 – April 5

Hong Kong’s Securities and Futures Commission (SFC) has introduced new guidelines for crypto exchanges offering staking services.

In an April 7 announcement, the SFC announced new guidelines for crypto exchanges offering staking services and locally authorized funds exposed to digital assets involved in staking. The announcement follows recent remarks from Christina Choi, the SFC’s executive director of investment products, who said during a speech at the Hong Kong Web3 Festival:

“The SFC is committed to supporting Hong Kong’s Web3 journey.”

In its announcement, the regulator said it “recognizes the potential benefits of staking in enhancing the security of blockchain networks and allowing investors to earn yields.” Consequently, the latest guidance allows crypto exchanges to provide staking service offerings.

Chen Wu, co-founder and CEO of Hong Kong-based and SFC-licensed crypto exchange Ex.io, told Cointelegraph that the firm appreciates the regulator “allowing licensed platforms to offer staking services under clear and responsible guidelines.” She said:

“The SFC’s announcement signals that more doors are opening — not just for staking, but for a wider range of Web3 products to take shape under a regulated and trusted framework.”

“Hong Kong is positioning itself not just as a compliant market, but as a real hub for Web3 adoption, where users’ interests are protected without slowing down progress,” Wu added.

Related: Hong Kong investment firm’s shares surge 93% after buying just 1 Bitcoin

New rules for staking services

The new rules were communicated by the regulator in its latest circular sent to crypto exchanges under its jurisdiction. The SFC requires crypto exchanges to obtain written approval before offering staking services, retain control over staked virtual assets and not delegate custody to third parties.

Cryptocurrency exchanges engaged in staking must disclose all relevant risks and details concerning fees, minimum lock-up periods, unstaking processes, outage processes and custodial arrangements to their customers. Lastly, the providers must report on their staking activities to the SFC.

A similar circular was sent to SFC-regulated crypto fund operators, with the new rules being relevant to funds with more than 10% of their net asset value invested directly or indirectly in digital assets. Funds can only acquire virtual assets that are also directly available to the local public and rely on SFC-authorized platforms. Leveraged exposure is prohibited.

Funds can engage in staking if it is consistent with the fund’s objectives, while providing clear disclosure and robust controls. An investor notice and possibly shareholder approval may be required if staking implementation leads to material strategy or risk profile changes.

Hong Kong bets on Web3

During her recent speech, SFC’s Choi recognized that the Web3 space is still evolving and that “its full benefits will unfold in time, likely with twists and turns.” She cited the speculative industry of non-fungible tokens (NFTs) as a cautionary tale that justifies caution in the current regulatory approach:

“Therefore, rather than chasing every new spark, we believe in a pragmatic approach — strengthening the fundamentals and fostering a supportive ecosystem where Web3 can thrive in a sustainable manner.“

Related: Hong Kong remains an ‘open and vibrant market’ for crypto, says financial secretary

The official’s comments follow recent reports that cryptocurrency exchange Bybit announced the shutdown of its NFT marketplace as the market is running out of steam. The decision follows a similar decision by major NFT marketplace X2Y2 announced in late March.

The non-fungible token market is seeing a significant downturn. Daily NFT trading volume was over $18 million 364 days ago before Bybit’s announcements and stood at $5.34 million when the decision to shut down the platform was made public — a 70% fall.

When arguing why Web3 companies should choose Hong Kong as their headquarters, Choi pointed out that Hong Kong ranks third in the Global Financial Centres Index. Furthermore, local regulators have set clear guidelines for crypto industry firms, and Hong Kong provides easy access to Asian markets.

Global Financial Centres Index top 10. Source: LongFinance

In her closing statements, Choi said, “We stand today at the crossroads where traditional finance and the digital economy are converging to drive promising outcomes for our financial markets.” She added:

“The zero-to-one breakthrough has been made, and its future success would very much depend on how we nurture this convergence, that is, how we go from one to 100.“

Her statements echo Hong Kong’s financial technology sector, which has seen 250% growth since 2022. The SFC recently introduced a new roadmap to position the city as a global cryptocurrency hub.

The “ASPIRe” roadmap hopes to future-proof the local virtual asset ecosystem. It involves 12 initiatives spread across five broad categories, which include providing market access, optimizing compliance and frameworks and improving blockchain efficiency.

Magazine: Korea to lift corporate crypto ban, beware crypto mining HDs: Asia Express