Hong Kong plans to complete proposals to regulate virtual asset traders and custodians and submit the rules to the city’s Legislative Council in 2026, the Treasury and Financial Services Bureau (FSTB) and the Securities and Futures Commission (SFC) said on Wednesday.
The proposals, developed after a two-month public consultation that garnered more than 190 responses, aim to create a licensing framework for virtual asset trading and custody services. The rules will be framed by the Anti-Money Laundering and Anti-Terrorist Financing Ordinance and will reflect existing requirements for securities trading.
The Hong Kong government is developing a regulatory environment to encourage the development of the city’s crypto industry in an effort to establish it as Asia’s preferred crypto hub over Singapore. Its stance contrasts with that of China, which is intensifying its crackdown on virtual currencies.
In February, the SFC announced new licensing regimes for over-the-counter trading along with a review of derivatives and margin trading for virtual assets. In April, it gave the green light to staking services for exchanges and authorized funds, albeit under strict asset control and risk disclosure requirements. Spot cryptocurrency exchange-traded funds have been trading since 2024.
The proposed custody regime focuses on securing private keys and protecting client assets, while the rules for brokers align with licensing expectations for securities dealers. Both are part of the SFC’s broader ASPIRe roadmap aimed at improving access to regulated virtual asset markets.
The SFC also launched a consultation to extend supervision to virtual asset advisers and managers. The regime would follow the principle of “same business, same risks, same rules” and apply standards comparable to those of securities advisory and asset management services, regulators said. Comments must be submitted by January 23.
