Key Highlights
- Hong Kong plans to introduce new licensing rules for crypto advisory and asset management firms.
- The rules follow a “same business, same rules” approach, aligning crypto rules with those of traditional firms.
- The proposals are part of a broader plan to bring the entire crypto sector under a unified legal structure.
Hong Kong’s Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) today launched a new consultation proposing formal licensing requirements for virtual asset advisory and asset management service providers.
The proposal, announced on Tuesday, focuses on how crypto firms that give advice or manage digital asset investments will be licensed and controlled under a formal system. They plan to turn this proposal into a law and submit it to the Legislative Council this year.
Strong market support behind the proposal
According to the regulators, the proposal received strong market support during the consultation stage. They said it follows the principle of “same business, same risks, same rules,” meaning if crypto companies do the same type of work as traditional finance companies, they should follow similar standards.
Moreover, the advisory rules are aligned with Type 4 regulated activities, which involve giving investment advice, while the management rules are aligned with Type 9 activities, which involve managing investment funds under Hong Kong’s Securities and Futures Ordinance.
How the proposed rules would work
Under the advisory part of the plan, any company that advises on virtual assets will need to be licensed. This includes firms that tell clients what crypto to buy, when to sell, or how to build a crypto investment plan. Even if the advice is part of a larger service, it will still fall under the rule.
Meanwhile, the management rule will focus on companies that control clients’ crypto portfolios and make investment decisions on their behalf. According to the rule, these firms will be required to meet strict licensing rules similar to those of traditional asset managers as well.
The proposal also introduces capital requirements. Firms that do not hold client assets would keep at least HKD 100,000 in liquid capital, while firms that do hold client assets will need higher capital levels. For firms with multiple licenses, the highest capital requirement will apply instead of stacking different obligations.
Part of a complete crypto regulatory system
The regulators said these rules will work together with other crypto regulations already in place in Hong Kong. Moreover, the city already has existing rules for virtual asset trading platforms and stablecoin issuers, as well as upcoming rules for VA dealing and custody services.
Together, they are designed to cover the full crypto system, including trading, storage, advice, and management, keeping the whole crypto industry in Hong Kong under one connected legal structure.
“The conclusion of further consultation marks the final leg of our journey to complete the regulatory framework for digital assets, paving the way for the long-term scaling of our ecosystem,” SFC Chief Executive Officer Julia Leung said in the announcement.
She also noted that aligning crypto rules with traditional finance rules will help protect investors and support safe innovation at the same time.
What’s next?
The next step is for the government to finalize the legal draft under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615).
After that, the bill will be sent to the Legislative Council in 2026. Regulators have also told companies already working in the crypto space, as well as new firms, to speak with the SFC early so they can understand the rules and prepare for licensing.
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