News update: Hong Kong moves closer to a full virtual asset services regime
On 26 May 2026, the Securities and Futures Commission (“SFC”) and the Financial Services and the Treasury Bureau (“FSTB”) published their consultation conclusions on the proposed regulatory regimes for virtual asset (“VA”) advisory service providers (“VA Advisory Regime”) and virtual asset management service providers (“VA Management Regime”). Pádraig Walsh from our Digital Asset and Cryptocurrency practice reviews the key points.
VA advisory services
The SFC and FSTB have expressed their views on the scope of the VA Advisory Regime and the definition of VA advisory services.
Advice concerning acquisition or disposal of VAs only: The proposed scope of the VA Advisory Regime will be limited to advice on VAs only. The regime will not cover technology tools that objectively filter information to assist users to conduct self-directed research without making a recommendation or similar advice. The regime will also exclude advice on securities or derivatives.
Substance over form: The SFC will look at the substance of the activity, not its label, when determining whether an activity constitutes advising on VAs. For instance, advising on VA labelled as pure utility token will not be important if the VA is in substance a payment or governance token that falls within the scope of the statutory definition of VAs.
Technology neutral: VA advisory services using technology such as algorithms and AI Large Language Models (LLMs) will not change the fact that the services are VA advisory services regulated by the VA Advisory Regime.
The respondents generally agreed with the definition and scope of VA advisory services but sought to clarify the boundaries of regulated VA advice and the availability of exclusions.
The SFC and FSTB acknowledged the significance of digital channels and the role of finfluencers in influencing investor behaviour. However, they noted that finfluencers are not unique to the VA sector and are increasingly prevalent in traditional financial markets. The SFC and FSTB will conduct a holistic review of the existing regime for traditional financial products, and then conduct a separate review for the VA Advisory Regime.
VA Management Services
“VA Management Services” include any person who carries on a business in Hong Kong in providing a service of managing a portfolio of VAs for another person. The VA Management Regime will apply to the management of portfolio of VAs where the manager has discretionary power to make investment decisions in respect of the VA portfolio for another person.
The VA Management Regime will largely mirror regulations that apply to Type 9 regulated activity (asset management) (“RA9”) under the SFO:
No minimum threshold: There will be no minimum threshold of VA in a portfolio before the VA Management Regime. This means that the inclusion of VA in a portfolio, however small, will result in a requirement to be licensed for VA Management Services. This approach is consistent with regulatory standards for RA9 activities.
Multiple licences may be required: If a person manages a portfolio consisting of both VAs and traditional investment products referencing VAs, they will need a VA Management Licence under the AMLO and an RA9 Licence under the SFO.
Exception for VA management licensee: A VA Management licensee will not need a separate VA dealing licence if its dealing activities are carried out solely for the purpose of providing VA management services.
Technology neutral: The VA Management Regime is also intended to be technology neutral. The use of technological tools itself will not change the fact that management services are provided in substance.
Regulatory requirements
The SFC applies a general principle of “same activity, same risks, same regulation” to VA activities.
Financial resource requirements: Type 4 regulated activities for advising on securities (“RA4”) and VA advisory services are functionally quite similar. The financial resource requirements to be imposed on VA advisory services will follow those that apply to RA4 licensed corporations. Similarly, the VA Management Regime will largely follow the regulations applicable to RA9 licensed corporations.
No double regulatory capital requirements: Corporations licensed under the corresponding securities licensing regimes (e.g. RA4 or RA9) will not need to double their regulatory capital requirements if they become licensed under the VA Advisory Regime or VA Management Regime.
The FSTB and SFC will finalise the legislative proposal for establishing the licensing regimes for VA advisory and VA management providers under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615). They expect to introduce a bill to the Legislative Council in 2026.
There will be no transition period after the legislation passes. Firms involved in VA related activities are encouraged to begin preparation for the new VA licensing regimes, if they have not already done so.
Final thoughts
The coverage of Hong Kong’s VA licensing regime is becoming more comprehensive. In December 2025, the SFC and FSTB announced that consultation conclusions on legislative proposals to regulate virtual asset dealers and custodians were complete. Soon, licences for practically the full suite of VA activities will be available in Hong Kong. This will mark a pivotal step in completing Hong Kong’s regulatory framework under the SFC’s ASPIRe roadmap.
Pádraig Walsh and Evelyn Wong
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Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication. This article was published on [6 August 2026].