Hong Kong is tightening its grip on the digital asset sector with new licensing requirements for virtual asset dealers and custodians. The Financial Services and Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) confirmed the move on 24 Dec 2025, following a two-month consultation that saw "broad market support" for the new regimes.
Hong Kong To Enforce New Custody, Dealing Licenses
26 December 2025 - 08:48 CET
By Sandmark staff
The proposals will bring these service providers under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. The government plans to introduce the formal bill to the Legislative Council in 2026.
Securities model for private keys
Under the new framework, virtual asset dealers will be regulated similarly to Type 1 securities brokers. However, the most significant shift targets custodians, who must now meet strict SFC standards for managing private keys.
This move is part of the SFC’s ASPIRe blueprint, a five-pillar roadmap launched on 19 Feb 2025 to transition Hong Kong into a global digital asset hub. The new licenses fulfill the "Access" pillar, intended to streamline how institutional liquidity enters the local market. Christopher Hui, Secretary for Financial Services and the Treasury, stated the regimes strike a "prudent balance" between market growth and investor protection.
Advisory services under scrutiny
The regulatory expansion is not stopping at custody. A second consultation was launched concurrently, targeting virtual asset advisory and management services. This follow-up intends to apply the "same business, same risks, same rules" principle to firms providing investment advice or managing crypto portfolios.
The SFC is now inviting industry feedback on these advisory licenses, with a deadline of 23 Jan 2026. This follows the 1 Aug 2025 enactment of the Stablecoins Ordinance, which has already forced several issuers to seek HKMA licensing to remain operational in the territory.
