Hong Kong Advances Licensing Push for Crypto Advisory and Management Firms

Hong Kong is taking another major step in tightening oversight of its digital asset industry after the Financial Services and the Treasury Bureau and the Securities and Futures Commission unveiled the final consultation conclusions for new virtual asset licensing regimes.

The proposed framework focuses on firms offering crypto-related advisory and asset management services under the city’s Anti-Money Laundering and Counter-Terrorist Financing Ordinance. Regulators said industry participants broadly supported the initiative, particularly the principle of applying equal rules to businesses that carry similar risks.

Under the upcoming structure, companies providing recommendations tied to buying or selling virtual assets would fall under the advisory regime, while firms managing crypto portfolios with discretionary authority would be regulated under the management framework.

The SFC noted that the rules mirror existing standards used for traditional securities advisory and discretionary asset management businesses, reinforcing Hong Kong’s strategy of integrating digital assets into its wider financial system rather than treating them separately.

The framework also introduces minimum capital requirements depending on the nature of the business. Firms that do not hold customer assets would need at least HKD 100,000 in liquid capital, while operators safeguarding client funds could face requirements of up to HKD 5 million in paid-up capital and HKD 3 million in liquid assets.

Regulators added that entities holding multiple licenses would not be forced to meet overlapping capital obligations. Instead, they would only need to comply with the highest applicable threshold across their regulated activities.

The licensing proposals arrive alongside separate plans covering virtual asset dealing and custody operations, forming part of Hong Kong’s broader push to establish a comprehensive regulatory environment for the crypto sector.

SFC Chief Executive Officer Julia Leung said the consultation marks the final phase in building the city’s digital asset regulatory framework, adding that stronger oversight is intended to improve investor protection while still encouraging responsible innovation.

Authorities plan to introduce the legislation to Hong Kong’s Legislative Council in 2026, while regulators are already encouraging prospective crypto advisory and management firms to begin early engagement and pre-application discussions with the SFC.