Hong Kong Enhances Regulatory Measures for Virtual Asset Services
Hong Kong is set to enhance regulatory measures for virtual asset advisory and management service providers as part of a broader initiative to tighten control over its digital asset ecosystem. The Financial Services and the Treasury Bureau, alongside the Securities and Futures Commission (SFC), released the findings from a recent consultation on Tuesday, which focuses on the establishment of formal licensing requirements for businesses offering investment advice or portfolio management in the realm of digital assets.
Regulatory Framework and Industry Feedback
This initiative builds upon a prior discussion paper circulated on December 24, 2025, and aims to formally regulate not just trading platforms and custody services, but also the growing sector of virtual asset advisory firms. According to the SFC, the feedback from the consultation has been overwhelmingly positive, with 51 submissions received from various stakeholders, including industry professionals, trade groups, and chambers of commerce.
In accordance with the principle of “same business, same risks, same rules,” the forthcoming regulations will categorize virtual asset advisory services under Type 4 regulated activities, while those managing virtual asset portfolios will fall under Type 9 regulated activities in alignment with the Securities and Futures Ordinance. As a result, entities operating in this space will be held to standards comparable to traditional asset management firms.
Government Commitment to Financial Innovation
Secretary for Financial Services and the Treasury, Christopher Hui Ching-yu, highlighted that this regulatory framework is a critical component of Hong Kong’s evolving digital asset strategy. He pointed out that the Policy Statement 2.0 released in June 2022 emphasizes the city’s commitment to fostering prudent financial innovation while enhancing risk management and safeguarding investors.
The SFC’s Chief Executive Julia Leung Fung-yee described the consultation’s outcomes as a significant milestone in improving Hong Kong’s regulatory landscape for digital assets, asserting that the new rules would align with standards observed in traditional financial services and encourage responsible innovation.
Next Steps for Compliance
Furthermore, the SFC is urging current providers and potential new entrants in virtual asset advisory or management to begin discussions with the regulator before the licensing framework becomes effective, facilitating a smoother compliance transition. The proposed legislation is expected to be introduced to the Legislative Council in 2026, providing a comprehensive governance structure for advisory and management services in the digital asset domain, thus expanding regulatory reach into trading, custody, advice, and portfolio management under a unified legal framework in Hong Kong.
