On May 26, the Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) of Hong Kong released a consultation conclusion regarding legislative proposals to regulate service providers offering advice on virtual assets and those providing virtual asset management services in Hong Kong. The proposed licensing regime for virtual asset advisory and virtual asset management services received broad market support during the consultation period.

Adhering to the principle of "same business, same risks, same rules," the scope of the new licensing regime will be aligned with the scope of regulated activities under the Securities and Futures Ordinance for Type 4 (advising on securities) and Type 9 (asset management) activities, respectively.

The FSTB and the SFC are now proceeding to finalize the legislative proposals for the new regime under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Chapter 615), with the aim of submitting a bill to the Legislative Council in 2026.

Together with the proposed licensing regimes for virtual asset trading and virtual asset custody, this series of new regimes will enhance participation in Hong Kong's digital asset market while contributing to building a robust and secure ecosystem under the SFC's "ASPIRe" roadmap.

Ms. Julia Leung, Chief Executive Officer of the SFC, stated, "The conclusion of this further consultation marks the final step in refining our digital asset regulatory framework, paving the way for the long-term development of our ecosystem. The broad market support reflects the necessity of establishing a robust and comprehensive regulatory framework. The new regime, aligning with standards for traditional financial services, will not only strengthen investor protection but also promote responsible innovation."

Mr. Christopher Hui, Secretary for Financial Services and the Treasury, stated, "The FSTB's 'Policy Statement on Development of Digital Assets in Hong Kong 2.0' issued last June articulates our vision of promoting responsible financial innovation and developing Hong Kong into a leading global digital asset center while strengthening risk management and investor protection. The proposed regulatory regime covering service providers offering advice on virtual assets and those providing virtual asset management services is a crucial part of expanding Hong Kong's legal framework for digital assets. Together with the existing licensing regimes for virtual asset trading platforms and stablecoin issuers, and the proposed regimes for virtual asset trading and custody services, our legal framework will connect the key nodes across the entire digital asset ecosystem, forming a system as trustworthy and sustainable as that of traditional finance, guiding us towards the vision outlined in the Policy Statement 2.0."

The SFC strongly encourages service providers currently engaged in or intending to engage in offering advice on virtual assets or virtual asset management to contact the SFC early to initiate discussions prior to submitting an application. This will help the industry better understand the proposed regime, advance the licensing process more efficiently, and ensure compliance with regulatory requirements under the new system.