Hong Kong is taking another step towards stricter cryptocurrency supervision. On December 24, the Treasury and Financial Services Office and the Securities and Futures Commission jointly published a summary of the consultation. This outlines plans to advance licensing rules for virtual asset trading and custody service providers. The move aims to strengthen regulation while supporting the long-term development of Hong Kong’s digital asset market. Officials said the framework will focus on market integrity, investor protection and operational resilience.
Licensing Regime for Trading and Custody Providers
Under the proposal, providers offering virtual asset trading services will be subject to a licensing regime similar to that of traditional securities trading. The structure closely reflects Type 1 regulated activities under the Hong Kong Securities and Futures Ordinance. For custodial service providers, the approach will be more limited but stricter.
吴说获悉，根据香港财务事务及库务局（财库局）与证券及期货事务监督委员会(证监会)供者的发牌制度。此举旨在加强对虚拟资产交易与托管服务的监管，确保市场的稳健和可持续发展。此次咨询还提到，针对虚拟资产管理服务和提供意见的服务…
— 吴说区块链 (@wublockchain12) December 24, 2025
Regulators plan to address risks linked to holding client assets. Especially the control and custody of private keys. The goal is to reduce custody-related failures and improve the security of clients’ assets. The consultation summary highlighted strong industry support. The majority of respondents supported expanding regulation to include trading and custody, following the launch of the virtual asset trading platform licensing regime in June 2023.
Market feedback shapes policy direction
The initial consultation period closed in August 2025. Regulators received more than 190 submissions from market participants, industry groups, chambers of commerce and professional bodies. Comments broadly supported the direction of the proposals. However, respondents also asked for clearer definitions and more customized requirements for different types of virtual asset services. In response, authorities refined the framework to better distinguish between trading, custodian, management and advisory functions. This separation is intended to reduce confusion and ensure that companies face rules aligned with their actual activities.
New Consultation on Advisory and Asset Management Services
In addition to the consultation summary, Hong Kong launched a new month-long public consultation. This phase focuses on licensing regimes for virtual asset advisory services and virtual asset management providers. Originally, these services were expected to be included under the commercial services framework. Regulators have now changed course. Instead, they plan to regulate them under systems similar to those used in traditional stock markets. This change aims to clearly define which activities are under each license. The new consultation period will run until January 23, 2026 and regulators have asked for public comment.
Legislative route and global positioning
Officials said the proposed licensing regimes aim to balance innovation with risk management. They also emphasized Hong Kong’s ambition to remain a global financial center. While maintaining high regulatory standards. After reviewing the comments from the last consultation. The government plans to finalize legislative proposals. Authorities hope to present the draft ordinance to the Legislative Council in 2026.
If approved, the framework would further solidify Hong Kong’s approach to cryptocurrency regulation. It would also more closely align the supervision of virtual assets with existing financial market rules. In short, Hong Kong is signaling continuity rather than policy change. Regulation will expand, expectations will rise and companies will need clearer compliance strategies as the city moves towards a more structured digital asset regime.
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