Hong Kong plans to finalize its proposals to regulate brokers and custodians of virtual assets and introduce the rules to the city’s Legislative Council in 2026, the Financial Services and Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) said on Wednesday.
The proposals, developed after a two-month public consultation which attracted more than 190 responses, aim to create a licensing framework for trading and custody services of virtual assets. The rules will fall under the Anti-Money Laundering and Counter-Terrorism Financing Ordinance and will reflect existing securities trading requirements.
The Hong Kong government is developing a regulatory environment to encourage the development of the city’s crypto industry with the aim of making it the crypto platform of choice in Asia compared to Singapore. Its position contrasts with that of China, which is intensify its repression on virtual currencies.
In February, the SFC announced new licensing regimes for over-the-counter transactions alongside a review of derivatives and margin trading for virtual assets. In April, these are green light staking services for approved exchanges and funds, although subject to strict asset control and risk disclosure requirements. Spot crypto exchange traded funds have been trading since 2024.
The proposed custodian regime focuses on securing private keys and protecting client assets, while broker rules align with licensing expectations for securities intermediaries. Both are part of the SFC’s broader ASPIRe roadmap to improve access to regulated virtual asset markets.
The SFC has also launched a consultation to extend oversight to advisors and virtual asset managers. The regime would follow the principle of “same activities, same risks, same rules” and apply standards comparable to those of securities advisory and asset management services, regulators said. Comments are due by January 23.
