Hong Kong Sets Standards: The New Era of Crypto Regulation Between Dealers and Custodians

In the past twelve months, Hong Kong’s cryptocurrency regulatory landscape has shown significant gaps. While retail trading platforms had clear guidelines to follow, asset custodians and dealers operating at large volumes still functioned in a regulatory vacuum. With the arrival of the 2025 Christmas holidays, this situation has finally been resolved. The Financial Services and the Treasury Bureau (FSTB) and the SFC have completed their public consultations, launching a licensing regime specifically designed for these crucial intermediaries.

A regulatory framework built on institutional trust

The new system completes the SFC’s ASPIRe vision and transforms Hong Kong into a financial hub where every participant, from custody to management, operates according to strict standards. The key principle is elegantly summarized: “same activity, same risk, same rules.” Crypto dealer licenses will follow exactly the same protocols required of Type 1 securities dealers, ensuring continuity with traditional financial markets.

For custodians, the requirements are particularly stringent. They must demonstrate they possess the systems and expertise to securely manage investors’ private keys—an uncompromising responsibility. This is not only a regulatory response but also reflects Hong Kong’s determination to attract serious institutional operators who expect the highest level of protection.

Hong Kong’s consultative model facilitates adaptation

Unlike other markets that impose already definitive rules, Hong Kong has chosen a dialogic approach. The “pre-application discussions” allow companies to engage with regulators before the regulatory framework is fully finalized, reducing the risk of future surprises. This strategy favors early applicants, giving them a competitive advantage in preparing licensing dossiers.

Regulatory attention will soon extend to advisors and virtual asset managers, ensuring that those offering advice and managing funds are subject to the same rigorous controls as platforms. This maintains a coherent ecosystem where transparency applies to both technological decisions and human oversight.

Official statements confirm commitment

SFC CEO Ms. Julia Leung commented: “The significant progress in our virtual asset regulatory framework ensures that Hong Kong remains at the forefront of the global digital market, building a reliable, competitive, and sustainable ecosystem.”

The Secretary for Financial Services and the Treasury, Mr. Christopher Hui, added: “The proposed licensing regimes strike a prudent balance between market development, risk control, and investor protection.”

International context accelerates regulatory standardization

Hong Kong is not acting in isolation. In Europe, Spain is fully implementing the MiCA framework, with a strict deadline of July 1, 2026, for all crypto companies to comply. Meanwhile, Russia adopts a more conservative approach, limiting the volumes that ordinary investors can allocate to digital instruments. These parallel dynamics demonstrate that 2026 marks a turning point: after years of regulatory ambiguity, cryptocurrencies will become an authorized and closely supervised sector.

Implications and prospects

Hong Kong’s move to complete its regulatory framework represents a crucial step. It is not just about regulating consumer-facing platforms but also overseeing the sector’s “invisible infrastructure”—specialized custodians and dealers operating behind the scenes. With this initiative, Hong Kong consolidates its role as a financial hub where digital innovation coexists with world-class institutional oversight, paving the way for a mature and resilient crypto economy.