Key Highlights
- Hong Kong is introducing licensing rules for virtual asset dealers and custodians to make the crypto market safer and more regulated.
- Dealers will follow rules similar to traditional securities, while custodians must protect clients’ digital keys.
- A new consultation is open for regulating virtual asset advisory and management services until January 23, 2026.
Hong Kong has taken another step to tighten oversight on the digital asset sector, as financial regulators confirmed they will move ahead with new licensing rules for virtual asset dealers and custodians.
This decision was announced today by the Financial Services & the Treasury Bureau and the Securities and Futures Commission after completing public consultations. Regulators said they received more than 190 written responses from companies, industry groups, and members of the public.
What the new licensing rules mean
According to the announcement, most of them supported the plan to expand regulation beyond trading platforms to include firms that deal in virtual assets or hold them on behalf of clients.
Regulators said feedback generally backed the direction of the proposals while asking for clearer explanations on how some parts would work in practice. Authorities said these views were taken into account when finalizing the next steps.
Under the proposed system, companies dealing in virtual assets will need to follow rules similar to those already used in the traditional stock market. This means they will have to meet regulatory standards before they can operate in Hong Kong.
For custodians, which are firms that keep virtual assets for clients, the rules will mainly focus on safety. In simple terms, custodians will need strong systems to protect private digital keys, which are used to access and control virtual assets. This is meant to reduce the risk of loss, theft, or misuse.
What officials are saying
Christopher Hui, Secretary for Financial Services and the Treasury, said the move would strengthen the city’s legal framework. “The proposed establishment of licensing regimes for virtual asset dealing and custodian service providers marks a significant step in enhancing our legal framework for digital assets,” he said.
Hui added that the plan is designed to support market growth while also managing risks and protecting investors.
What comes next for crypto in Hong Kong
At the same time, regulators launched a new public consultation on whether to regulate virtual asset advisory and management services, which provide advice or manage virtual assets for others. The proposal follows the idea of applying the same rules to similar risks, which aligns these services with existing securities market regulations. Feedback on this consultation will be accepted until January 23, 2026.
The government aims to finalize the dealer and custodian rules and introduce a bill to the Legislative Council in 2026. Firms are also encouraged to engage with the SFC early so they can prepare for the new requirements.
Also Read: Hong Kong Proposes Insurance Rules for Crypto Investments
