TLDR
Hong Kong is expanding crypto rules to add new licensing regimes for virtual asset dealers and custodians, alongside a fresh consultation to license advisers and asset managers, with legislation targeted for 2026.
- Dealers and custodians must be licensed, covering OTC desks and strict key custody standards per a regulator update. See the announcement coverage.
- A separate consultation would license crypto advisers and asset managers under same business, same rules. See the policy update.
- The package sits under Hong Kongs AML law, with a bill planned for 2026, building on existing exchange and stablecoin licensing. See the timeline report.
Deep Dive
1. Dealers and Custodians
Hong Kong will require licenses for virtual asset dealers and custodians, closing gaps beyond trading platforms.
- Scope includes over the counter trading, brokers and block trades, aligning dealers with securities dealer standards while adapting for crypto risks. See the market brief.
- Custody rules emphasize private key security, asset segregation, internal controls and resilience. Dealers must hold client assets with licensed custodians in Hong Kong. See the detailed explainer.
- Regulators encourage early engagement through pre application discussions to speed compliant adoption once rules are live. See the overview.
Firms handling trades or client assets outside exchanges will face mandatory licensing, which can raise compliance costs but improves investor protections and institutional readiness.
2. Advisers and Managers
Regulators opened a new consultation to license virtual asset advisory and management providers.
- The proposal applies same business, same risks, same rules, mirroring traditional finance oversight with supervision, inspection and sanctions powers. See the policy update.
- This extends the perimeter from platforms and custody to advice and portfolio management, aiming for consistent standards across the value chain. See the timeline report.
Expect advice and asset management businesses to need explicit licenses, tightening marketing, suitability and conflict controls similar to securities firms.
3. Timing and Legal Basis
The expansion is slated to move into legislation in 2026, under Hong Kongs AML and counter terrorist financing ordinance.
- Authorities signaled a bill for the Legislative Council in 2026 after consultations, anchoring the regimes in AML law. See the timeline report and the policy update.
- This builds on existing mandatory exchange licensing and the stablecoin issuer regime introduced earlier in 2025. See the announcement coverage.
The legal perimeter will expand from platforms and stablecoins to dealers, custodians, advisers and managers. Firms should map activities to the new regimes and plan submissions.
Conclusion
Hong Kong is broadening its crypto framework to cover dealers, custodians and advisory or management providers, with rules embedded in AML law and a 2026 legislative timeline. The changes close OTC and custody gaps, align advice with traditional finance standards and aim to raise investor protection, making the market more navigable for institutions while increasing compliance obligations for operators.
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