Hong Kong Pushes Ahead With New Crypto Licensing Framework
The government of Hong Kong has advanced another major phase of its crypto regulatory strategy through new proposed licensing regimes targeting virtual asset advisory and management firms.
The city’s Financial Services and the Treasury Bureau and the Securities and Futures Commission released consultation conclusions this week outlining how crypto advisory and asset management providers will operate under Hong Kong’s Anti-Money Laundering and Counter-Terrorist Financing Ordinance.
According to regulators, industry feedback showed broad support for the proposed framework and its overall regulatory direction.
Officials said the approach follows the principle of “same business, same risks, same rules,” meaning crypto firms offering services similar to traditional financial institutions would face comparable regulatory standards.
New Rules Target Crypto Advisors and Portfolio Managers
Under the proposed framework, crypto advisory services would include businesses making recommendations involving the purchase or sale of digital assets.
Meanwhile, the virtual asset management regime would apply to firms that exercise discretionary control over crypto investment portfolios on behalf of clients.
The structure effectively mirrors existing rules already applied to securities advisory firms and traditional asset managers inside Hong Kong’s financial sector.
Regulators believe aligning crypto oversight with established financial frameworks will help create a more stable and institutionally trusted market environment.
Financial Requirements Introduced for Crypto Firms
The proposals also introduce baseline financial resource requirements for firms operating inside the sector.
According to the consultation conclusions, crypto firms that do not directly hold client assets would need to maintain minimum liquid capital of HKD 100,000, equivalent to roughly $12,700.
Firms that custody or manage customer assets would face much stricter requirements, including up to HKD 5 million in paid-up capital and HKD 3 million in liquid capital reserves.
Authorities also clarified that firms holding multiple licenses will not face duplicate capital requirements.
Instead, dually licensed companies would only need to satisfy the highest applicable capital threshold among their authorized business activities.
Hong Kong Wants a “Robust and Secure” Crypto Ecosystem
The advisory and management framework forms part of a broader digital asset regulatory expansion currently underway in Hong Kong.
Authorities are simultaneously developing additional rules for virtual asset dealing platforms and custody providers as part of a comprehensive crypto oversight system.
Regulators say the goal is to broaden participation in Hong Kong’s digital asset market while strengthening investor protection and improving market integrity.
SFC CEO Julia Leung described the latest consultation milestone as the “final leg” toward completing Hong Kong’s broader digital asset framework.
She added that aligning crypto rules with traditional finance standards would help support “responsible innovation” while improving investor confidence.
Hong Kong Continues Positioning Itself as Crypto Hub
Hong Kong has spent the last several years aggressively positioning itself as one of Asia’s leading regulated crypto hubs.
While several jurisdictions tightened restrictions on digital assets following the collapse of multiple crypto firms during previous market cycles, Hong Kong instead accelerated efforts to build regulated pathways for institutional participation.
The city has already approved spot crypto ETFs, introduced stablecoin licensing proposals, expanded tokenization frameworks, and opened regulated access to retail investors under specific conditions.
Officials have repeatedly emphasized that the goal is not to ban crypto activity, but to integrate digital assets into the traditional financial system under strict oversight standards.
Bill Expected in 2026
The Financial Services and the Treasury Bureau alongside the SFC said a formal bill covering the new crypto advisory and management rules is expected to be introduced to Hong Kong’s Legislative Council sometime in 2026.
Regulators also encouraged existing and prospective virtual asset firms to begin engaging with the SFC early through pre-application discussions.
The move signals that Hong Kong intends to continue expanding its regulated crypto ecosystem while attempting to attract institutional players seeking a legally structured environment for digital asset services.
