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Hong Kong Crypto Licensing Expands: Dealers and Custodians Face Strict New Mandate

Hong Kong is transferring forward with a significant growth of its crypto regulatory framework after regulators concluded consultations on new licensing regimes for digital asset sellers and custodians, tightening oversight throughout a wider a part of the digital asset market.

The Financial Services and the Treasury Bureau and the Securities and Futures Commission said on Dec. 24 that corporations offering digital asset dealing or custody providers in Hong Kong shall be required to acquire licenses as soon as the brand new framework takes impact.

New Licensing Plan Brings Crypto Brokers and Custodians Into Oversight

The transfer follows months of consultation and comes as authorities search to shut regulatory gaps that emerged as crypto exercise unfold past licensed exchanges into over-the-counter buying and selling, brokerage providers, and third-party custody.

Regulators mentioned the proposals acquired broad market assist and will now transfer into the legislative part, marking one other step in constructing a complete digital asset regime underneath the SFC’s ASPIRe roadmap.

According to the SFC launch, all digital asset sellers shall be regulated in a manner that carefully mirrors current guidelines for securities sellers.

Notably, the licensing requirement will cowl a variety of actions, together with digital asset-to-fiat and digital asset-to-virtual asset conversions, brokerage providers, block buying and selling, and associated advisory features, whether or not carried out on-line or by bodily shops.

This brings OTC buying and selling and broker-style providers squarely inside regulatory oversight for the primary time.

Also, underneath the deliberate framework, custodians will even face a devoted licensing regime centered on the safekeeping of consumer property. Any entity holding or controlling personal keys for consumer digital property in Hong Kong will have to be licensed or registered.

Regulators mentioned the regime is designed to deal with dangers round asset safety by requiring strict segregation of consumer property, sturdy inner controls over key administration, enhanced cybersecurity requirements, and sturdy enterprise continuity planning.

Dealers shall be required to position consumer property solely with licensed or registered custodians working in Hong Kong.

Both regimes will impose fit-and-proper necessities on candidates, alongside minimal monetary useful resource thresholds.

Dealers are anticipated to fulfill capital necessities of round HK$5 million, whereas custodians will face larger thresholds, together with HK$10 million in paid-up capital.

Hong Kong’s Crypto Framework Grows to Include Advisers and Managers

Alongside the seller and custodian regimes, regulators launched an extra session on extending licensing necessities to digital asset advisory and administration service suppliers.

The proposals would deliver crypto advisers and asset managers underneath an identical regulatory construction to their conventional finance counterparts, giving the SFC powers to oversee, examine, and sanction corporations working on this a part of the market.

SFC Chief Executive Officer Julia Leung mentioned the expanded framework is meant to assist a safe and aggressive digital asset ecosystem whereas sustaining sturdy investor safety.

Regulators are encouraging corporations within the new regimes to have interaction early with the SFC by pre-application discussions to raised put together for compliance.

Source: SFC

The newest step builds on a collection of regulatory developments over the previous yr. Hong Kong already requires crypto trading platforms to be licensed, with 11 exchanges authorised thus far underneath a compulsory regime that changed an earlier opt-in framework.

Earlier in 2025, the city brought its Stablecoin Ordinance into force, making a licensing regime for stablecoin issuers.

Authorities have additionally taken steps to broaden market entry, including allowing licensed exchanges to connect to global liquidity pools and easing sure token itemizing necessities.

The proposal, nonetheless topic to session, displays a cautious method that distinguishes between regulated stablecoins and extra risky crypto property.

The submit Hong Kong Crypto Licensing Expands: Dealers and Custodians Face Strict New Mandate appeared first on Cryptonews.

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