Hong Kong has finalized its regulatory framework for the digital asset industry, wrapping up a public consultation on a new licensing regime for firms advising on and managing virtual assets. The move is a milestone in the city's quest to become a global hub for cryptocurrency and blockchain innovation.
The new rules, announced by the Securities and Futures Commission (SFC), require all platforms trading virtual assets to obtain a license. The consultation, which began in February 2023, concluded with the SFC publishing a summary of responses and final guidelines on May 23, 2026. The framework aims to balance investor protection with market development.
Under the finalized regime, licensed platforms must comply with strict requirements on custody of assets, know-your-customer (KYC) procedures, and anti-money laundering measures. The SFC also clarified that retail investors will be allowed to trade major cryptocurrencies like Bitcoin and Ethereum on licensed platforms, subject to certain safeguards.
Industry participants have welcomed the clarity, with some noting that Hong Kong's approach is more permissive than mainland China's outright ban on crypto trading but more regulated than some other Asian hubs. The SFC has indicated it will continue to monitor the market and may adjust rules as needed.
