- Hong Kong plans stricter licensing standards for crypto advisory firms operating locally.
- New rules introduce higher capital requirements for firms holding client assets.
- Regulators expect broader crypto compliance framework legislation rollout during 2026.
Hong Kong regulators are preparing stricter licensing standards for crypto advisory firms as authorities finalize a wider digital asset oversight framework. The latest proposals would place virtual asset managers and advisers under compliance rules similar to traditional financial institutions.
The Financial Services and the Treasury Bureau alongside the Securities and Futures Commission released consultation conclusions supporting the upcoming regulatory regimes. Authorities confirmed that market participants largely backed the proposed framework and compliance direction.
Also Read: Google Buy Signal Near $383 Sparks Recovery Talk as $402 Target Emerges
Licensing Rules Will Mirror Traditional Financial Standards
According to the regulators, the framework follows the “same business, same risks, same rules” principle. Consequently, firms offering crypto investment recommendations would face obligations comparable to those governing securities advisory businesses.
The proposals would cover companies advising clients on acquiring or disposing virtual assets. Additionally, firms exercising discretionary authority over crypto portfolios would also require regulatory approval under the new structure.
Authorities also introduced financial requirements tied directly to operational risks and custody responsibilities. Firms without custody exposure must maintain at least HKD 100,000 in liquid capital. However, companies holding client assets could face requirements reaching HKD 5 million in paid-up capital.
Moreover, regulators confirmed that dually licensed firms would avoid duplicate capital obligations. Instead, those businesses would follow the highest financial threshold among their approved activities. Authorities believe that approach could simplify compliance while maintaining stricter oversight standards.
Regulators Push Crypto Firms Toward Early Compliance Discussions
The advisory and management proposals arrive alongside separate plans targeting crypto dealing and custody providers. Consequently, Hong Kong continues expanding a broader regulatory structure covering multiple sectors of the digital asset market.
SFC Chief Executive Julia Leung stated that the consultation conclusions marked the final phase toward completing Hong Kong’s crypto regulatory framework. She added that broad market support reflected growing demand for stronger investor safeguards and clearer compliance standards.
Additionally, authorities encouraged both existing and prospective crypto firms to engage regulators before submitting formal applications. Officials expect the proposed legislation to reach the Legislative Council during 2026.
Hong Kong’s latest regulatory push signals that authorities want wider institutional participation without loosening compliance expectations. As a result, crypto firms operating in the region may soon face tighter licensing obligations and significantly higher financial requirements.
Also Read: Toncoin Recovery Weakens as Bearish Pressure Returns to Market
