The FSTB and SFC have concluded consultations on virtual asset dealer and custodian regimes and have started another consultation for VA advisors and managers. Broad market support has led to plans to proceed with these legislative proposals, aiming to enhance Hong Kong's regulatory framework for digital assets.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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On December 24, 2025, the Financial Services and the Treasury Bureau ("FSTB") and the Securities and Futures Commission ("SFC") published their consultation conclusions on proposed legislative frameworks for the regulation of virtual asset ("VA") dealing and custodian service providers in Hong Kong. This initiative is part of the broader effort to complete Hong Kong's regulatory framework under the SFC's ASPIRe roadmap.
The proposed regulatory regimes for VA dealers and custodians are designed to align closely with the existing Type 1 dealing in securities, focusing on risk management, particularly the safekeeping of private keys for VA custodians. Both regimes aim to ensure the security of client assets and protect investors.
Interested parties are encouraged to engage with the SFC for pre-application discussions to ensure they are adequately informed and prepared to meet their obligations under the proposed regimes. Additionally, the FSTB and SFC have launched a consultation process for VA advisory and management service providers, following market feedback.
The proposed regimes for VA advisors and managers are modeled after those regulating similar services in the securities market, adhering to the 'same business, same risks, same rules' principle. This approach allows the SFC to set standards and effectively regulate these providers.
Ms. Julia Leung, CEO of the SFC, underscored the significant progress made in Hong Kong's VA regulatory framework, positioning it at the forefront of global digital asset market developments. Mr. Christopher Hui, Secretary for Financial Services and the Treasury, emphasized that the proposed licensing regimes strike an optimal balance between fostering market development, managing risks, and safeguarding investor interests.
The FSTB and SFC will finalize these legislative proposals under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, with plans to introduce a bill into the Legislative Council in 2026. Comments on the proposed VA advisor and manager regimes are invited until January 23, 2026.
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