Hong Kong finalizes crypto advisor and asset manager licensing

A Completed Regulatory Architecture

Hong Kong has taken the final step in building out its virtual asset regulatory framework. On May 26, the city's Financial Services and the Treasury Bureau (FSTB) and Securities and Futures Commission (SFC) published consultation conclusions on proposed licensing frameworks for virtual asset advisory and management service providers.

The licensing architecture maps neatly onto Hong Kong's existing Securities and Futures Ordinance. Virtual asset advisory activities will align with Type 4 regulated activities, which currently govern securities advice. Management services, meanwhile, fall under Type 9, the category for asset management.

Both licensing regimes will sit under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), the same legal umbrella that already covers virtual asset dealing and custody services following conclusions published in December 2025.

During the one-month public consultation completed in late January 2026, 51 submissions were received on the proposed regulatory regimes for VA advisory service providers and VA management service providers. The consultation showed broad market support for the proposed regimes, with respondents largely agreeing with the policy direction under the "same business, same risks, same rules" principle.

Legislative Timeline and What It Means for the Industry

With broad market support, and taking into account the feedback received in the consultations, the FSTB and the SFC are finalising the legislative proposals for the regulatory regimes for VA dealing, custodian, advisory and management service providers, with a target of introducing the relevant bill into the Legislative Council within this year.

Once implemented, any person who advises or manages VA portfolios, including those who actively market such services to the public, faces imprisonment of up to seven years and a fine of HK$5 million unless properly licensed. Consistent with the approach for dealing and custodian services, the proposals do not include transitional arrangements for existing VA advisors or managers.

SFC CEO Julia Leung framed the development in strong terms. "The conclusion of further consultation marks the final leg of our journey to complete the regulatory framework for digital assets, paving the way for the long-term scaling of our ecosystem," Leung said. "The broad market support demonstrates the strong need for robust and comprehensive regulation. Aligning with the standards for traditional financial services, the new regimes will bolster investor protection while fostering responsible innovation."

Combined with the comprehensive framework now covering dealing, custody, and advisory and management services, Hong Kong is positioning itself as having one of the most extensive virtual asset regulatory regimes globally. Existing and prospective VA advisory and management service providers are encouraged to engage with the SFC early to initiate pre-application discussions.

Sources
The Block: Hong Kong advances virtual asset advisory and management rulemaking
Sidley Austin: Hong Kong to Further Enhance Licensing Regime for Virtual Assets to Cover Advisors and Managers
Hong Kong Government: FSTB and SFC publish consultation conclusions on legislative proposals for regulating virtual asset dealing and custodian services