Hong Kong moves to tighten crypto advisory rules in major shift

Hong Kong authorities plan to introduce new licensing rules for virtual asset advisory and management service providers as the city expands oversight of its digital asset market.

The Financial Services and the Treasury Bureau and the Securities and Futures Commission (SFC) published consultation conclusions on Tuesday. The paper covers proposed rules for firms that give virtual asset investment advice or manage virtual asset portfolios. The SFC said the consultation followed an earlier paper launched on December 24, 2025.

Hong Kong expands virtual asset rules

The proposed framework would bring virtual asset advisory and management services under formal licensing. The move would extend regulation beyond trading platforms, custody services, and stablecoin issuers.

Authorities said the proposal received broad support from the market. The consultation drew 51 submissions from market participants, industry groups, chambers of commerce, and professional bodies.

The new rules will follow the principle of “same business, same risks, same rules.” Under that model, virtual asset advisory services will align with Type 4 regulated activity under the Securities and Futures Ordinance.

Virtual asset management services will align with Type 9 regulated activity. This means firms managing virtual asset portfolios would face rules similar to traditional asset managers.

The authorities aim to submit the legislative proposals to the Legislative Council in 2026. The planned rules would create separate regimes for advisory and management services.

Secretary for Financial Services and the Treasury Christopher Hui Ching-yu said the proposal forms part of Hong Kong’s wider digital asset policy. He said Policy Statement 2.0, released in June last year, set out the goal of supporting responsible financial innovation while improving risk controls and investor protection.

Hui said the new rules, together with existing regimes for virtual asset trading platforms and stablecoin issuers, would help cover the main parts of the digital asset market.

SFC chief executive Julia Leung Fung-yee said the consultation conclusion marks “the final step” in refining Hong Kong’s digital asset regulatory framework. She said the regime would match traditional financial service standards and promote responsible innovation.

SFC urges early talks with firms

The SFC encouraged firms already offering virtual asset advisory or management services to contact the regulator early. It also asked firms planning to enter the market to begin pre-application talks.

The regulator said early discussions would help service providers understand the proposed licensing process. It would also help firms prepare for compliance before the new rules take effect.

The proposed regime adds another layer to Hong Kong’s digital asset policy. It would give regulators oversight of trading, custody, advice, and portfolio management under a wider legal structure.