Since the turn of this decade, the conversation about virtual asset regulation in Hong Kong was really one conversation: do you need a VATP licence or don’t you? By the end of 2026, there will be at least five separate licences sitting under the regulatory perimeter, and most fintech and virtual asset businesses operating from Hong Kong will need to think about more than one of them.
That’s a real shift. If you issue, deal, custody, advise on or manage virtual assets from Hong Kong, or actively market or target virtual asset services at Hong Kong investors, the question is no longer “am I caught?” The question is “which of these regimes catches me, and what do I have to do about it?”
Here is the practical map.
What’s actually changed
The Hong Kong regulatory perimeter for virtual assets used to be narrow: VATPs (virtual asset trading platforms) and the limited uplift route that let SFC-licensed corporations bolt on virtual asset activities to existing Type 1, Type 4 and Type 9 licences under the Securities and Futures Ordinance (Cap. 571) (SFO). Almost everything else sat in a grey zone.
In about eighteen months that perimeter has effectively been closed. The Stablecoins Ordinance (Cap. 656) came into force on 1 August 2025, creating a HKMA-supervised regime for fiat-referenced stablecoin issuers. In December 2025, the FSTB and the SFC published consultation conclusions on new licensing regimes for virtual asset dealers and virtual asset custodians under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) (AMLO), with the bill targeted for the Legislative Council this year (FSTB / SFC, 24 December 2025). Then on 26 May 2026, the FSTB and the SFC published consultation conclusions on two further regimes: virtual asset advisory services and virtual asset management services (FSTB / SFC press release, 26 May 2026).
That’s the headline. The underlying principle, repeated by both regulators, is “same activity, same risks, same regulation.” Functionally, that means virtual asset businesses are being pulled into a regulatory architecture that looks a lot like the one securities firms have lived inside for years.
Here’s how the five licences break down.
1. The VATP licence (virtual asset trading platforms)
This is the one most people in the market know already. Since 1 June 2023, anyone operating a centralised virtual asset trading platform in Hong Kong, or actively marketing one to Hong Kong investors, has needed a VATP licence from the SFC. The VATP regime itself sits in Schedule 3B of the AMLO and is administered by the SFC in its capacity as the virtual asset regulator. If the virtual asset being traded is itself a “security” under the SFO, separate SFC licensing under the SFO also comes into play. Most centralised exchanges operating from Hong Kong need to think about both.
If you’re running a centralised exchange that takes principal positions, this is your starting point. It’s also the regime that has moved the most in the last twelve months.
On 3 November 2025, the SFC issued circulars expanding what licensed VATPs can do: integration of order books with global affiliate VATPs to share liquidity, virtual asset margin financing for professional investors, custody of a broader range of virtual assets including stablecoins, and a high-level framework for offering virtual asset perpetual contracts to professional investors (SFC Circular 25EC57; Davis Polk note, November 2025). The 12-month track record requirement for new tokens no longer applies for tokens offered to professional investors only.
The practical effect: a Hong Kong VATP licence is now closer to a real institutional trading licence than it was twelve months ago. It’s also significantly more demanding to obtain and to maintain.
Who needs to think about this: anyone operating, or planning to operate, a centralised virtual asset exchange or principal trading business from Hong Kong, or actively marketing one into Hong Kong.
2. The stablecoin issuer licence
If you issue, or plan to issue, a fiat-referenced stablecoin in Hong Kong, or you issue one that references the Hong Kong dollar from anywhere in the world, you’re caught by the Stablecoins Ordinance (Cap. 656). The regime went live on 1 August 2025 and is administered by the HKMA, not the SFC (HKMA implementation announcement, 29 July 2025; HKMA Stablecoin Issuers page).
The first window for licence applications closed on 30 September 2025, and the HKMA confirmed it received 36 applications. The first two licences were granted on 10 April 2026, to a joint venture led by Standard Chartered, HKT and Animoca Brands (Anchorpoint Financial Limited) and to HSBC (CoinDesk, 24 March 2026).
The headline number that matters for founders is the capital requirement: a minimum of HK$25 million in paid-up share capital (or its equivalent in another currency), plus a minimum HK$3 million in liquid capital, plus excess liquid capital broadly equivalent to twelve months of operating expenses (HKMA Guideline on Supervision of Licensed Stablecoin Issuers). The reserve requirements, the redemption-at-par obligations and the segregation rules together mean this is not a regime designed for a lean startup. It’s designed for issuers that look more like banks or major payment firms. We unpack the full regime in our guide to stablecoin issuer licensing in Hong Kong.
Worth noting: a stablecoin issuer licensed under the Stablecoins Ordinance is exempt from the upcoming virtual asset custodian licensing requirement when it custodies only its own issued stablecoins, because the HKMA already supervises that activity directly (Davis Polk client update, August 2025).
Who needs to think about this: any business issuing a fiat-referenced stablecoin from Hong Kong, or issuing a HKD-referenced stablecoin from anywhere. Also: any business in the second wave of applications, where the HKMA has signalled the bar will remain very high.
3. The virtual asset dealer licence (coming)
This is one of the two new regimes the FSTB and SFC concluded consultation on in December 2025. The virtual asset dealer licence will cover firms providing “VA dealing services,” meaning, broadly, the buying and selling of virtual assets for clients outside the VATP perimeter. Think OTC dealers, brokers and certain types of institutional intermediary that don’t run a trading platform but do trade virtual assets for or with clients.
The regime will sit under the AMLO and will adopt a “same business, same risks, same rules” approach: comparable conduct requirements, AML/CFT obligations and ongoing supervision to those that apply to securities dealers. The bill is targeted for introduction to the Legislative Council in 2026 (FSTB / SFC, 24 December 2025; Charltons summary).
The headline number that matters for founders is the capital requirement: a minimum of HK$5 million in paid-up share capital (or its equivalent in another currency), plus a minimum HK$3 million in liquid capital, plus excess liquid capital broadly equivalent to twelve months of operating expenses. The regime that will catch a large number of operators currently sitting outside the formal SFC perimeter and relying on offshore structures or carve-outs to operate.
Who needs to think about this: OTC desks, virtual asset brokers, principal dealers, market makers operating outside the VATP perimeter, and firms structuring institutional client trades from Hong Kong.
4. The virtual asset custodian licence (coming)
The second of the December 2025 conclusions. The virtual asset custodian licence will apply to any business providing third-party custody of virtual assets for clients in Hong Kong, except where another regime (in particular the Stablecoins Ordinance) already covers the activity (FSTB / SFC, 24 December 2025).
This is the regime that will matter most to the institutional crypto-custody firms, the qualified custodians used by funds, and any business taking custody of client virtual assets as a standalone service. It will also matter to fintech firms that custody client assets as a side effect of doing something else (wallet providers, certain payment firms, certain Web3 platforms) and that have so far operated without a Hong Kong custody licence because no regime required it.
The headline number that matters for founders is the capital requirement: a minimum of HK$10 million in paid-up share capital (or its equivalent in another currency), plus a minimum HK$3 million in liquid capital, plus excess liquid capital broadly equivalent to twelve months of operating expenses
The combination of the custodian regime and the dealer regime is, in effect, Hong Kong closing the last big gaps left by the VATP-only approach. Once both are in force, almost every meaningful step in the virtual asset value chain inside Hong Kong will require a specific licence.
Who needs to think about this: qualified custodians, institutional crypto custody platforms, wallet providers that hold client keys, and any firm that takes custody of virtual assets for clients as part of a broader service.
5. The virtual asset adviser and virtual asset manager licences (coming)
This is the regime that just hit the news on 26 May 2026. The FSTB and the SFC published consultation conclusions on two parallel licensing regimes (FSTB / SFC, 26 May 2026):
- A virtual asset advisory services regime, modelled on Type 4 (advising on securities) under the SFO.
- A virtual asset management services regime, modelled on Type 9 (asset management) under the SFO.
Both will sit under the AMLO. The principle, again, is “same activity, same risks, same regulation.” Virtual asset advisers and managers will be regulated comparably to their securities-side equivalents. Indicative capital requirements being discussed include a baseline of HK$5 million in paid-up share capital, minimum required liquid capital of HK$3 million for those that do hold client assets, with liquid capital requirements that scale depending on whether the licensee holds client assets (Charles Russell Speechlys analysis; Conventus Law summary). Final numbers will sit in the bill and the SFC’s licensing handbook.
For the existing market, there are two things worth flagging. First, there is no general grandfathering for firms already advising on or managing virtual assets without a licence. When the regime kicks in, they’ll have to apply. Second, firms that already hold an SFC Type 4 or Type 9 licence with the existing virtual asset uplift are expected to benefit from an expedited approval path into the new regime, rather than going through a full fresh application. This matters a lot for EAMs, family offices and asset managers that took the time to uplift their existing licences over the last two years.
Who needs to think about this: virtual asset advisers, family offices running virtual asset strategies, EAMs with virtual asset components, crypto asset managers and crypto fund managers, and any business “recommending” virtual asset acquisitions or disposals as part of a paid service. Also: any business currently operating offshore but with a Hong Kong-facing client book.
How to think about which licence (or licences) apply to you
The first question is whether the activity you’re doing is, in substance, dealing, custody, advising, managing, issuing or operating a venue. Most virtual asset businesses do more than one of these.
A rough decision frame:
- If clients can place orders against your prices or your book, you’re probably in VATP or dealer territory.
- If you hold client virtual assets and they can ask for them back, you’re probably in custodian territory.
- If you charge for recommending what clients should buy or sell, you’re probably in adviser territory.
- If you manage a portfolio of virtual assets on a discretionary basis for someone else, you’re in manager territory.
- If you mint or issue a fiat-referenced stablecoin, you’re in stablecoin issuer territory.
The second question is whether anything in your business structure can be simplified or relocated to avoid duplicate licensing. Sometimes the answer is yes: a sensible re-papering of intra-group flows, or a hard separation between the trading entity and the custody entity, can reduce the number of regimes you sit in. Sometimes the answer is no: if you genuinely do five different things, you’ll need to think about five different licences.
The third question is sequencing. The Stablecoins Ordinance and the VATP regime are live. The dealer and custodian regimes are expected to go through LegCo in 2026, with transitional arrangements likely to be staged. The adviser and manager regimes will follow the same bill. Lead times for SFC and HKMA licence applications are long, and the regulators are deliberately keeping the bar high. The cost of waiting until the bill is gazetted is that you join a much longer queue.
What to do now
If you’re operating a virtual asset business with any Hong Kong nexus, three practical steps make sense before the next set of bills lands in LegCo.
Map your activities against the five regimes. Be honest about substance, not just structure. The “we’re offshore” answer is going to age badly under the new dealer and custodian regimes if you have meaningful Hong Kong operations or a Hong Kong client base.
If you already hold an SFC licence with a virtual asset uplift, get advice on the expedited path into the new adviser or manager regime. This is the single cleanest route into the new regulatory architecture and the existing market participants who built towards it over the last two years are about to be rewarded for the effort. We look at the adviser and manager regimes in more detail in Are You About to Become a Regulated Virtual Asset Adviser in Hong Kong?
Build the AML/CFT, conduct and capital infrastructure now. Every one of these regimes will demand it. Most of the work is portable across regimes. Almost none of it can be done in a hurry once the SFC or the HKMA has your application in front of them.
At TITUS, we’ve spent the last two years sitting with Hong Kong virtual asset clients through stablecoin issuer applications, VATP licensing, the Type 1/4/9 uplift route, and the early conversations on the dealer and adviser regimes. If you want a working view of where your business actually sits in the new perimeter, and what to do about it, we’re happy to have that conversation. Contact us or book a consultation.
This article is general information only and does not constitute legal advice. The regulatory regimes described above are at different stages of implementation and the detail will continue to develop. For advice on how a specific business is affected, please contact TITUS Solicitors.