TLDR
Hong Kong industry groups are pushing back against Securities and Futures Commission (SFC) limits on how brokerages can offer crypto trading to clients.
- The Securities and Futures Professionals Association president has criticized SFC rules that cap and pre register client accounts used for virtual asset trading as ill fitted to crypto.
- Critics argue these limits block retail access, complicate brokerage participation, and may drive volume to offshore platforms without materially improving anti money laundering controls.
- New virtual asset dealer and custodian legislation targeted for 2026 gives a short window for the industry to reshape these rules and determine how competitive Hong Kong will be as a crypto hub.
Deep Dive
1. What The Limits Are And Who Is Complaining
According to the Hong Kong Securities and Futures Professionals Association (SFPA), current SFC rules require brokerages dealing in virtual assets to pre register designated funding accounts and comply with strict limits on account types and investor eligibility for crypto trading.
SFPA president Chan Chi wah has publicly criticized these brokerage account registration limits for virtual assets, arguing they force crypto into a framework designed for traditional securities and create unnecessary barriers for both intermediaries and clients. His comments, reported via local media and summarized in a CoinsKid community article, have amplified industry concerns about account registration caps.
The pushback is coming from mainstream securities professionals, not just crypto natives, which increases pressure on the SFC to adjust its approach.
2. Why The Rules Are Seen As Problematic
Industry representatives argue that virtual asset markets are structurally different from traditional securities markets: trading is wallet based, operates 24/7, and tokenized assets blur categories such as security versus commodity.
They say applying hard caps and pre registration rules borrowed from bank account or securities logic can:
- limit how many accounts clients can use to fund crypto trades,
- complicate onboarding for brokerages, and
- still fail to target real risks like layering and suspicious flows.
Chan has advocated a risk based AML framework that focuses on abnormal transactions and beneficial ownership, noting that the European Unions AML rules do this more directly than blanket account caps.
If compliance effort is spent on rigid account limits rather than smarter monitoring, costs can rise while actual financial crime risk is not proportionally reduced.
3. What To Watch Before 2026 Legislation
Hong Kong regulators plan new legislation for virtual asset dealers and custodians in 2026 under the Anti Money Laundering and Counter Terrorist Financing Ordinance, and have already collected nearly two hundred industry responses on draft rules.
The SFPA and other groups are using this consultation window to argue for a dedicated virtual asset framework that: widens safe retail access, keeps strong KYC and AML checks, and removes account caps that push trading to unregulated offshore venues. The SFC has not yet issued revised guidance on the pre registration mechanism or brokerage limits.
The key practical signal will be whether the final 2026 rules soften account caps and eligibility limits; if not, a larger share of Hong Kong demand may stay on global exchanges instead of local licensed platforms.
Conclusion
Hong Kongs attempt to regulate crypto through traditional brokerage style account limits is facing organized pushback from its own securities industry. The outcome of the 2026 virtual asset legislation process will determine whether Hong Kong becomes a genuinely competitive, regulated crypto hub or loses flow to offshore venues that can offer more flexible access with comparable risk controls.
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