Hong Kong tightens crypto rules for dealers and custodians – Details

For the past year, Hong Kong’s crypto plans felt incomplete.

Retail trading platforms had rules to follow, but the most important players, custodians who protect assets and dealers who handle big trades, were still operating without clear guidelines.

And, finally, on Christmas Eve, that changed.

Hong Kong’s new crypto rules

The Financial Services and the Treasury Bureau (FSTB) and the SFC have now finished consultations on a new licensing system for virtual asset dealers and custodians.

By regulating these mid-level players, the city is finally prepared to welcome serious institutional investors who expect top-tier safety.

Hong Kong’s motto, “same business, same risks, same rules,” is no longer just a slogan.

The new licenses are modeled on existing Type 1 securities rules, meaning crypto dealers will now follow the same strict standards as traditional finance.

Custodians, in particular, must prove they can handle private keys safely, a crucial part of protecting investor funds.

This update doesn’t just plug a gap in the system.

It completes the SFC’s ASPIRe roadmap and turns Hong Kong’s crypto market into a system built for institutional trust, where every part of the process, from storing assets to executing trades, is carefully monitored.

Discussion prevails finalization

Unlike many countries that take a tough stance on crypto, Hong Kong is inviting firms to talk to regulators early, before the rules are fully finalized.

These “pre-application discussions” give early applicants an advantage, helping them prepare and avoid surprises later.

Meanwhile, new rules are already in progress.

The next stage focuses on virtual asset advisors and asset managers, ensuring that the people who give guidance and manage money follow the same high standards as trading platforms.

This keeps Hong Kong’s crypto environment connected, balanced, and transparent, not just in technology, but in human decision-making too.

Execs weighing in

Expressing the same, the Chief Executive Officer of the SFC, Ms Julia Leung, said,

“The significant progress in our VA regulatory framework ensures Hong Kong remains at the global forefront of digital asset market developments by fostering a trusted, competitive and sustainable ecosystem.”

Echoing similar sentiments, the Secretary for Financial Services and the Treasury, Mr Christopher Hui, added,

“ The proposed licensing regimes strike a prudent balance among fostering market development, managing risks and protecting investors.”

This comes at a time when a lot of changes are happening in Spain and Russia, showing that the days of waiting to regulate crypto are over.

Other countries are going through similar developments

In Europe, Spain is fully adopting the MiCA framework, which gives crypto companies a strict deadline of 1st July 2026.

Meanwhile, Russia is taking a more practical approach with a system that limits how much regular investors can put in.

All this shows that in 2026, crypto will no longer be a free-for-all.

It will become a licensed, highly supervised industry where only firms that follow the rules can survive.

Final Thoughts

• Hong Kong’s shift signals a new era of institutional-grade oversight, closing gaps in custody, dealing, advisory, and asset management.
• By licensing dealers and custodians, the city is finally regulating the “invisible infrastructure” of crypto, not just the consumer-facing platforms.