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Hong Kong Expands Crypto Licensing With New Proposal for Advisors

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 regulators—the Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC)—have proposed new rules requiring companies that advise on or manage virtual assets to be formally licensed. They are seeking public feedback on these proposals.

The plan, revealed on Tuesday, details a new system for licensing and overseeing companies that offer cryptocurrency investment advice or manage digital assets. Officials intend to finalize this plan as legislation and present it to the Legislative Council later this year.

Strong market support behind the proposal

Regulators reported the proposal was well-received by the market during the review period. They explained it’s based on the idea that crypto firms offering services similar to traditional financial companies should be held to the same standards and regulations.

The guidelines for providing advice fall under Hong Kong’s regulations for investment advice (Type 4 regulated activities), and the rules for managing assets relate to managing investment funds (Type 9 regulated activities) as defined by the Securities and Futures Ordinance.

How the proposed rules would work

The new rule will primarily target companies managing and investing cryptocurrency for clients. These firms will need to follow similar strict licensing requirements as traditional investment companies.

As part of my research, I’ve been reviewing new proposals that include capital requirements for firms. Essentially, companies that don’t handle client assets will need to maintain at least HKD 100,000 in liquid capital. Those that *do* manage client assets will face even stricter requirements. Importantly, if a firm holds multiple licenses, we’re looking at applying the *highest* capital requirement from those licenses, rather than adding them all together.

Part of a complete crypto regulatory system

As an analyst, I understand the regulators are positioning these new rules to complement Hong Kong’s existing crypto framework. The city is building a comprehensive system – they already have rules for trading platforms and stablecoins, and they’re soon releasing regulations for virtual asset dealing and custody services. It’s clear they’re aiming for a fully regulated environment.

This comprehensive framework aims to regulate all aspects of the crypto industry in Hong Kong – from buying and selling to safekeeping, guidance, and overall administration – bringing everything under a single, unified legal system.

In a recent announcement, SFC CEO Julia Leung stated that finishing the consultation process is the last step in establishing rules for digital assets, which will allow our system to grow sustainably in the future.

She also pointed out that creating consistent rules for crypto and traditional finance will both safeguard investors and encourage responsible innovation.

What’s next?

My next step as a researcher is to monitor the government’s finalization of the legal draft based on the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615).

The bill is scheduled to go before the Legislative Council in 2026. Both existing and new cryptocurrency companies are encouraged to contact the Securities and Futures Commission (SFC) as soon as possible to learn about the regulations and get ready for licensing.

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2026-05-26 21:57