Hong Kong: New licensing regimes for virtual asset services

Hong Kong is progressing plans to extend licensing requirements beyond Virtual Asset ('VA') trading platforms and stablecoin issuers to other core parts of the VA ecosystem.  The new regimes target VA dealing, VA custodian, VA advisory and VA management services.

Hong Kong regulators have published consultation conclusions on regulating VA dealing services  and VA custodian services, as well as a further consultation on regulating VA advisory and VA management services. The papers outline new licensing requirements for providers of such services, including Hong Kong regulated intermediaries and banks (or their associated entities) currently providing such services under the existing framework who will benefit from an expedited approval process.

With certain key aspects still under consideration, those providing such services in Hong Kong should monitor the upcoming legislative process, with draft legislation expected during 2026, and engage with the relevant regulator as early as possible. 

Key takeaways include:

• The definition of VA dealing will broadly mirror “dealing in securities” under traditional securities legislation, but the precise scope of exemptions has yet to be ironed out. It also remains to be confirmed if VA dealers will be required to partner with SFC-licensed VATPs when conducting their dealing. VA dealers will be required to custody client VAs with VA custodians licensed under the new regime.
• The VA custodian regime will target those who safekeep private keys on behalf of clients.
• It is proposed that the scope and regulatory requirements for VA advisory and VA management will broadly mirror those for advising on securities and asset management under existing securities legislation. It is proposed that there will be no de minimis exemption for VA exposure, such that an entity providing asset management services for a portfolio that invests in VAs, regardless of the level of VA allocation, will need to be licensed for VA management.
• Active marketing of these services to the Hong Kong public (even from outside Hong Kong) will be prohibited without the appropriate licence.
• Hong Kong‑regulated intermediaries and banks (or their associated entities) already providing VA services under the existing framework will be brought within the new regimes but will benefit from an expedited approval process. 

Please take a look at our client briefing on this topic here and contact Vincent Chan for further information.