May 28, 2026
By Shubhii Verma
Hong Kong is preparing to tighten oversight of its cryptocurrency industry by introducing new licensing requirements for firms that provide virtual asset advisory and management services. The move marks another major step in the city’s effort to build a comprehensive regulatory framework for digital assets while positioning itself as a global crypto hub.
The Financial Services and the Treasury Bureau, together with Hong Kong’s Securities and Futures Commission (SFC), released consultation conclusions outlining the proposed framework. The rules would apply to companies offering investment advice related to virtual assets as well as firms managing crypto-focused investment portfolios.
Aligning Crypto Services With Traditional Financial Standards
Under the proposal, these businesses would be brought under formal licensing regimes similar to those governing traditional financial institutions. Authorities said the framework follows the principle of “same business, same risks, same rules,” meaning crypto-related services would face regulatory standards comparable to those in conventional finance.
The consultation process received broad industry support, with regulators collecting 51 submissions from market participants, professional organizations, chambers of commerce, and industry groups. Officials stated that the feedback generally supported stronger oversight and clearer compliance standards for the rapidly growing digital asset sector.
According to the proposal, virtual asset advisory services would be aligned with Hong Kong’s existing Type 4 regulated activity under the Securities and Futures Ordinance, which covers securities advisory businesses. Meanwhile, virtual asset portfolio management services would fall under Type 9 regulated activity, the same category used for traditional asset management firms.
This would effectively require crypto advisors and portfolio managers to meet licensing, compliance, operational, and investor protection standards similar to those imposed on traditional financial service providers.
Authorities plan to submit the legislative proposals to Hong Kong’s Legislative Council sometime in 2026. If approved, the rules would establish separate licensing systems for crypto advisory firms and digital asset managers.
Christopher Hui Ching-yu, Hong Kong’s Secretary for Financial Services and the Treasury, said the initiative is part of the government’s broader digital asset strategy outlined in Policy Statement 2.0 last year. The policy aims to encourage responsible innovation while strengthening investor safeguards and risk management within the crypto market.
SFC Chief Executive Julia Leung Fung-yee described the consultation conclusions as the “final step” in refining Hong Kong’s digital asset regulatory framework. She said the goal is to ensure crypto businesses operate under standards consistent with traditional finance while still allowing innovation to grow.
Expanding Hong Kong’s Digital Asset Regulatory Framework
The proposed changes would expand Hong Kong’s crypto oversight beyond trading platforms, stablecoin issuers, and custody providers, creating one of the region’s most comprehensive digital asset regulatory systems.
