Hong Kong Expands Virtual Asset Licensing to Cover Trading, Custody, Advisory, and Asset Management

According to Hong Kong's Financial Services and the Treasury Bureau, on June 2, Hong Kong announced plans to establish a unified regulatory framework covering virtual asset trading, custody, investment advisory, and asset management services, requiring all relevant institutions to obtain licensing or registration from the Securities and Futures Commission (SFC). The regulatory scope will align with the Securities and Futures Ordinance, covering Class 1 (securities trading), Class 4 (investment advisory), and Class 9 (asset management) regulated activities, with a focus on private key management and customer asset protection for custody services.

Under the "same business, same risk, same rules" principle, licensed institutions must meet strict standards in capital adequacy, risk management, financial reporting, professional competence, and customer asset protection. No deemed license transition arrangement will be provided to existing service providers. The government aims to submit legislative amendments to the Legislative Council within 2026.