Hong Kong to Regulate Virtual Asset Dealing & Custodian Service Providers, 1) Virtual Asset Dealing Regime Will be Similar to Type 1 License (Dealing in Securities) & 2) Virtual Asset Custodian Service Providers Regime Will Focus on Managing Risks (Safekeeping Private Keys of Clients) to Secure Client Assets & Protect Investors
25th December | Hong Kong
Hong Kong will be regulating virtual asset dealing & custodian service providers, with 1) Virtual asset dealing regime to be similar to Type 1 license (Dealing in securities) & 2) Virtual asset custodian service providers regime will focus on managing risks (Safekeeping private keys of clients) to secure client assets & protect investors. Announcement (24/12/25): “The Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) today published consultation conclusions on legislative proposals to regulate virtual asset (VA) dealing and custodian service providers in Hong Kong (Note 1). At the same time, the FSTB and the SFC commenced a further consultation on new regimes for providers of VA advisory and management services. With broad market support, the FSTB and the SFC will proceed with the legislative proposals or the VA dealer and custodian regimes (Notes 2 and 3). The new regimes mark a pivotal step in completing Hong Kong’s regulatory framework to support a robust and secure VA ecosystem under the SFC’s ASPIRe roadmap (Note 4). For VA dealers, the regime will be aligned closely with that for Type 1 (dealing in securities) regulated activity under the Securities and Futures Ordinance and similar exemptions are under consideration. As for VA custodians, the new regime will focus on managing risks related to safekeeping private keys of client VAs in Hong Kong, to secure client assets and protect investors. Interested parties are encouraged to reach out to the SFC in order to initiate pre-application discussions on the proposed regimes. This proactive engagement will allow entities to obtain more information about the proposed regimes and work collaboratively with the SFC. By preparing early, pre-application participants can ensure that they will be well-informed and well-positioned to meet their obligations under the proposed regimes. Moreover, in response to market feedback, the FSTB and the SFC launched a further consultation today to expand the licensing scope to cover VA advisory and management service providers. Adhering to the “same business, same risks, same rules” principle, these new regimes are modelled on those regulating similar services in the securities market and will empower the SFC to regulate VA advisors and managers and set standards for them (Note 5).”
“ Hong Kong to Regulate Virtual Asset Dealing & Custodian Service Providers, 1) Virtual Asset Dealing Regime Will be Similar to Type 1 License (Dealing in Securities) & 2) Virtual Asset Custodian Service Providers Regime Will Focus on Managing Risks (Safekeeping Private Keys of Clients) to Secure Client Assets & Protect Investors “
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Notes:
- Refer to the press release for the FSTB and the SFC’s joint consultations on VA dealer and custodian regimes launched on 27 June 2025.
- More than 190 responses from a broad spectrum of stakeholders were received. For the lists of respondents, please refer to the Annex sections of the two consultation conclusions papers.
- The FSTB and the SFC will finalise the legislative proposals for the new regimes under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615), with a view to introducing a bill into the Legislative Council in 2026.
- The proposed regimes support “Access” to Hong Kong’s VA market, one of the five pillars under the SFC’s “ASPIRe” roadmap issued on 19 February 2025.
- Interested parties are invited to submit comments on the proposed VA advisor and manager regimes to the FSTB or the SFC by 23 January 2026.
Hong Kong to Regulate Virtual Asset Dealing & Custodian Service Providers, 1) Virtual Asset Dealing Regime Will be Similar to Type 1 License (Dealing in Securities) & 2) Virtual Asset Custodian Service Providers Regime Will Focus on Managing Risks (Safekeeping Private Keys of Clients) to Secure Client Assets & Protect Investors
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