Hong Kong's crypto framework adopts new standards for digital asset managers and custodians

Hong Kong’s financial marketplace has finally filled a significant regulatory gap in its crypto ecosystem. Although retail trading platforms operated under established rules, clear guidelines were lacking for two crucial actors: custodians responsible for asset security and dealers orchestrating large-scale operations. With the holiday announcement from the Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC), this incomplete chapter has been definitively written.

A regulatory framework built on institutional trust

The new licensing regime represents a paradigm shift in Hong Kong’s approach to the sector. Inspired by the motto “same business, same risks, same rules,” authorities have modeled the requirements for dealers and custodians following the standards already applied to Type 1 securities in traditional finance.

For custodians, compliance entails particularly stringent responsibilities. They must demonstrate technical and organizational capabilities to securely manage private keys, a fundamental element in protecting investors’ assets. Similarly, dealers will need to adhere to rigorous standards of execution and operational transparency.

This update is not just a regulatory tweak. It completes the SFC’s ASPIRe roadmap, transforming Hong Kong into a market where every level of the value chain—from custody to execution—is subject to calibrated and reliable oversight.

Proactive regulatory dialogue creates competitive advantages

A distinctive feature of Hong Kong’s approach is its openness to pre-application dialogue with companies. Before regulations are finalized, firms can discuss with authorities, anticipating requirements and reducing non-compliance risks. This advantage offers early license aspirants the opportunity to structure operations to meet standards from the outset.

The regulatory momentum does not stop here. Authorities are already working on the next phase, which will extend licensing requirements to advisors and virtual asset managers, ensuring consistency between those providing advice and those managing capital. The goal is to build a transparent, balanced, and reliable system in every component.

Alignment within regulatory institutions

Industry leaders have publicly reaffirmed the strategic value of these developments. Julia Leung, CEO of the SFC, highlighted how progress in the virtual assets regulatory framework positions Hong Kong at the forefront of global standards, fostering a trustworthy, competitive, and sustainable ecosystem. Simultaneously, Christopher Hui, Secretary for Financial Services and the Treasury, emphasized that the new regime strikes a balanced approach between market push, risk management, and investor protection.

International context accelerates standardization

Hong Kong’s decision reflects a global trend. In Europe, Spain has fully embraced the MiCA framework, with compliance deadlines set for July 1, 2026. Russia, on the other hand, pursues a more restrictive model, imposing limits on small investors’ investments.

These developments clearly signal that the era of crypto as a gray regulatory space is coming to an end. By 2026, the sector will become a regulated and closely supervised arena, where only operators meeting the requirements can thrive.

Concluding reflections

Hong Kong is charting a new path in digital asset oversight, filling critical gaps in custody, operations, advisory, and fund management. With the new licensing regime, the city directly addresses the “invisible infrastructure” of the crypto market—the crucial component that concerns not only consumers but the entire institutional ecosystem. This step marks the official recognition that the sector’s maturity requires regulatory foundations as solid as those of traditional finance.