Hong Kong advances virtual-asset adviser and manager licensing

Hong Kong’s Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) on Tuesday published consultation conclusions that propose licensing regimes for virtual asset advisory and virtual asset management under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. The documents follow public feedback collected during the consultation period.

Respondents largely supported applying a “same business, same risks, same rules” principle. Under the proposed framework, virtual asset advisory would cover firms that recommend the acquisition or disposal of virtual assets, while virtual asset management would apply where a firm has discretionary control over a client’s virtual asset portfolio. The proposals align these scopes with existing regulated activities for securities advisers and discretionary asset managers.

The regimes set baseline financial resource requirements tied to whether firms hold client assets. Firms that do not hold client assets would need at least HKD 100,000 in liquid capital. Entities that hold client assets could face paid-up capital requirements of up to HKD 5 million and liquid capital requirements of up to HKD 3 million. For firms authorized for multiple activities, regulators said a dually licensed entity would meet the highest applicable capital requirement rather than separate floors for each licence.

The consultation also included parallel proposals for virtual asset dealing and custody services. The SFC and FSTB described the combined package as a regulatory framework covering dealing, custody, advisory and management services for virtual assets with the aim of clearer legal rules and consistent supervision for activities involving crypto tokens and related digital assets.

The FSTB and SFC said they plan to introduce a bill to the Legislative Council in 2026 to give the regimes statutory effect. Regulators encouraged existing and prospective virtual asset advisers and managers to engage early with the SFC through pre-application discussions to clarify licensing expectations and compliance obligations before submitting formal applications.

SFC Chief Executive Julia Leung described the consultation conclusions as completing the final stage of the policy process to establish the regulatory framework for digital assets, adding: “The broad market support demonstrates the strong need for robust and comprehensive regulation. Aligning with the standards for traditional financial services, the new regimes will bolster investor protection while fostering responsible innovation.”