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Hong Kong's Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) published consultation conclusions on Tuesday for licensing regimes covering virtual asset advisory and virtual asset management services under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. The framework scopes advisory rules to firms making recommendations on acquiring or disposing of virtual assets, and management rules to firms exercising discretionary control over VA portfolios, aligning both with existing regulated activities for securities advisory and discretionary asset management. Respondents largely backed the policy direction under the "same business, same risks, same rules" principle.
Why it matters
The capital floor is tiered: firms not holding client assets need HKD 100,000 (about $12,760) in liquid capital, while firms holding client assets must carry up to HKD 5 million ($638,095) in paid-up capital and HKD 3 million ($328,862) in liquid capital. Dually licensed entities will not face double capital requirements — the framework defaults to the highest capital floor among their authorized activities. SFC CEO Julia Leung called the conclusion "the final leg of our journey to complete the regulatory framework for digital assets, paving the way for the long-term scaling of our ecosystem." The FSTB and SFC plan to introduce a bill to the Legislative Council in 2026, with parallel regimes for VA dealing and custody already in motion.
Market impact
For Hong Kong-based and prospective VA advisory and management firms, the practical effect is convergence with traditional finance licensing — the SFC is signalling that running a virtual asset book now looks operationally closer to running a securities book than to running an unregulated crypto desk. Existing and prospective providers are being pushed to engage the SFC early for pre-application discussions, suggesting the regulator wants compliant entrants through the door before the bill lands.
Frequently asked questions
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What did Hong Kong's FSTB and SFC announce on virtual asset licensing?
They published consultation conclusions for licensing regimes covering virtual asset advisory and management services, aligning the scope with existing securities advisory and discretionary asset management rules under the "same business, same risks, same rules" principle.
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What capital requirements apply to licensed VA advisors and managers?
Firms not holding client assets need HKD 100,000 in liquid capital. Firms holding client assets need up to HKD 5 million in paid-up capital plus HKD 3 million in liquid capital. Dually licensed entities default to the highest floor across their authorized activities.
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When will the new VA advisory and management rules become law?
The FSTB and SFC aim to introduce the implementing bill to Hong Kong's Legislative Council in 2026, completing the final leg of the jurisdiction's digital asset regulatory framework alongside parallel regimes for VA dealing and custody.
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Who needs to be licensed under the new VA advisory and management regimes?
Firms making recommendations on acquiring or disposing of virtual assets fall under the advisory regime. Firms exercising discretionary control over VA portfolios fall under the management regime. Existing and prospective providers are encouraged to open pre-application discussions with the SFC.
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How does this fit Hong Kong's broader digital asset strategy?
The package complements parallel proposals for virtual asset dealing and custody services, giving Hong Kong what regulators describe as a complete end-to-end licensing architecture for digital assets, positioning the city against Singapore and Dubai for institutional crypto mandates.
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