Back
Hong Kong Proposes Licensing System for Virtual Asset Service Providers

Hong Kong Proposes Licensing System for Virtual Asset Service Providers

FSTB and SFC will table AMLO-based licensing for virtual asset dealers and custodians in 2026; SFC is also consulting on extending rules to advisers and managers, with comments due Jan. 23.

Fact Check
The assessment is based on exceptionally strong and direct evidence from primary sources. Official announcements from both the Hong Kong Securities and Futures Commission (SFC) and the Hong Kong government explicitly confirm the conclusion of consultations on a 'proposed licensing regime' and 'legislative proposals' for regulating virtual asset providers. These high-authority sources directly validate the statement that a licensing system has been proposed. A secondary source from a blockchain analysis firm further corroborates that policy announcements are being made. Several other provided sources discuss different, more specific regulatory proposals concerning the insurance sector's involvement with crypto-assets. These sources are not relevant to the broader VASP licensing system mentioned in the statement and do not contradict it. There is no conflicting evidence among the sources. The consistency and high authority of the primary sources lead to a high-confidence conclusion that the statement is true.
    Reference: 1
Summary

Hong Kong’s Financial Services and the Treasury Bureau and the Securities and Futures Commission said they plan to complete proposals to regulate virtual asset dealers and custodians and introduce them to the Legislative Council in 2026. The framework will establish licensing under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), mirroring securities-dealing requirements, and follows a two-month public consultation that received over 190 responses. The SFC also launched a consultation to extend oversight to virtual asset advisers and managers under a “same business, same risks, same rules” approach, with comments due by Jan. 23. Recent measures include an OTC trading licensing regime, a review of derivatives and margin trading, SFC-approved staking for licensed exchanges and funds with strict controls, and active spot crypto ETFs since 2024. The custodian regime emphasizes private key security and client asset protection, while dealer rules align with securities intermediaries as part of the SFC’s ASPIRe roadmap.

Terms & Concepts
  • Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO): Hong Kong’s legal framework for AML/CFT compliance, under which virtual asset dealing, custody, advisory, and management services would be licensed.
  • Virtual Asset Advisory: Professional advice on virtual asset investments and strategies, proposed to follow standards similar to securities advisory services.
  • Virtual Asset Management: Managing virtual asset portfolios on behalf of clients, proposed to align with rules for traditional asset management.