Hong Kong Crypto Licence Requirements: Who Needs What

"Do we need a licence?" is usually the first question a crypto business asks about Hong Kong. The answer depends on what the business actually does, because Hong Kong has no single crypto licence. It has a set of separate regimes, each attaching to a particular activity, and a business can easily fall within two or three of them at once.

Four more regimes are on the way. The Government published its final consultation conclusions in May 2026 and has said it intends to introduce the implementing bill into the Legislative Council before the end of the year. Unlike the 2023 exchange regime, there will be no deeming arrangement, so businesses that are currently unregulated will not be able to keep trading while their applications are processed.

This guide sets out which activity triggers which licence, what each regime requires, and what has changed over the past twelve months.

Which activity triggers which licence

• Operating a centralised virtual asset trading platform. A virtual asset trading platform (VATP) licence from the SFC under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. Platforms that may list tokens with securities features are advised by the SFC to apply under the Securities and Futures Ordinance as well, for Type 1 (dealing in securities) and Type 7 (automated trading services), because a token's classification can change over time. A single consolidated application can be filed through WINGS.
• Issuing a fiat-referenced stablecoin. A stablecoin issuer licence from the HKMA under the Stablecoins Ordinance.
• Managing a fund with virtual asset exposure. An SFC Type 9 licence, with the SFC's virtual asset fund manager terms and conditions where 10% or more of the portfolio's gross asset value is in virtual assets.
• Dealing in or distributing virtual asset products. SFC Type 1, subject to the SFC's conditions for virtual asset dealing services.
• Advising on virtual assets. SFC Type 4, with corresponding virtual asset conditions.
• Issuing a token. Not itself a licensed activity, but the token's characterisation determines what follows. Tokens with securities features engage the prospectus and dealing provisions of the Securities and Futures Ordinance. Our guide to token launches and ICOs in Hong Kong covers the analysis.

Two activities that are not yet licensed but shortly will be are dealing in virtual assets (which is wider than over-the-counter shops, and captures brokers and digital platforms) and virtual asset custody. Advisory and management services for non-securities virtual assets are also being brought in. See "What is coming" below.

The VATP licence

The regime has been in force since 1 June 2023 and is administered by the SFC. On the SFC's most recently published list, thirteen platforms hold licences and six applications remain pending.

A licence is required where a platform carries on business in Hong Kong, or actively markets its services to Hong Kong investors. It is worth being precise about that test. Having some Hong Kong users is not automatically the trigger; marketing to them is.

One point that catches people out. The transitional arrangements are often described as closed, and the application window did close on 29 February 2024 with the non-contravention period ending on 31 May 2024. But deemed licensed status continues until the SFC actually grants or refuses an application, and the SFC's published list still shows deemed applicants operating. So there are platforms lawfully serving Hong Kong today without a formal licence, which is not the same thing as the regime having no gaps.

What the SFC requires

• Hong Kong incorporation and a permanent place of business here.
• Responsible officers. At least two, approved by the SFC, of whom at least one must be an executive director. Every executive director must in fact be approved as a responsible officer.
• Paid-up share capital of not less than HK$5 million.
• Liquid capital of the higher of HK$3 million and the basic amount under the Financial Resources Rules. Separately, and this is frequently missed, the platform must hold liquid assets equal to at least twelve months of its actual operating expenses on a rolling basis. The HK$3 million figure is a floor, not the whole test.
• Custody through an associated entity. Client virtual assets must be held by a wholly owned subsidiary that is itself incorporated in Hong Kong and holds a trust or company service provider licence under the AMLO. At least 98% of client virtual assets must be in cold storage.
• Compensation arrangements covering 50% of client virtual assets held in cold storage and 100% of those held in hot or other storage.
• Token due diligence. Documented diligence on every token admitted to trading. A token made available to retail investors must generally be included in at least two acceptable indices issued by two different index providers, independent of each other, one of which must have experience publishing conventional securities indices.
• Retail safeguards, including knowledge assessments, risk profiling and exposure limits.
• External assessment. Reports from qualified external assessors, submitted before and after licensing. The process was revamped by SFC circulars in December 2024 and January 2025, so applicants should work from the current framework rather than the 2023 one.
• AML and CFT compliance in full, including the travel rule.

Our guide to cryptocurrency exchange licensing under the VATP regime goes through the application in more depth.

What has been relaxed

A list of requirements written in 2023 now reads as unduly restrictive, because the SFC has opened the regime up considerably over the past year. In November 2025 it disapplied the twelve-month track record requirement for tokens offered only to professional investors and for HKMA-licensed stablecoins, permitted shared order books with global affiliates, allowed custody of tokens not admitted to trading, and permitted distribution of products giving virtual asset exposure. In February 2026 it went further, permitting affiliated market makers on licensed platforms, introducing a framework for virtual asset perpetual contracts for professional investors, and allowing margin financing against Bitcoin and Ether collateral subject to a minimum 60% haircut.

These sit within the SFC's ASPIRe roadmap, published on 19 February 2025, and the Government's Policy Statement 2.0 on digital asset development of 26 June 2025.

Stablecoin issuers

The Stablecoins Ordinance came into force on 1 August 2025. An HKMA licence is required to issue a fiat-referenced stablecoin in Hong Kong, to issue a stablecoin referencing the Hong Kong dollar anywhere in the world, or to actively market such a stablecoin to the Hong Kong public.

The core requirements are paid-up share capital of at least HK$25 million, liquid capital subject to an HK$3 million floor, reserves covering twelve months of operating expenses, full backing of the stablecoin by high-quality liquid reserve assets held with proper segregation, and redemption at par. On redemption the requirement is specific: requests must be processed within one business day of receipt unless the HKMA approves otherwise. Governance, fit and proper controllers, disclosure and audit obligations sit alongside.

The licensing position has moved, and any guide written before April 2026 will be wrong on this. The HKMA received 36 applications in the first batch by the 30 September 2025 deadline. On 10 April 2026 it granted the first two licences, to Anchorpoint Financial Limited (a joint venture of Standard Chartered Bank (Hong Kong), HKT and Animoca Brands) and to The Hongkong and Shanghai Banking Corporation. Both took effect the same day, and as at the HKMA's register those remain the only two.

On further licences, the HKMA's Chief Executive said in April 2026 that the authority takes "an open yet prudent stance, with no definitive inclination at this stage", that the licensing threshold will remain high, and that if more licences are granted "the overall number will remain very limited". That position was reaffirmed to the Legislative Council in June 2026.

Anchorpoint launched HKDAP, Hong Kong's first regulated Hong Kong dollar stablecoin, on 12 August 2026. It runs on Ethereum and was initially made available to corporates and professional investors through OSL and HashKey. Our note on Hong Kong stablecoin regulation covers the regime in detail.

There is a second-order consequence for everyone else. A joint HKMA and SFC circular of 27 May 2026 gives licensed stablecoins materially lighter treatment in the hands of intermediaries: a licensed corporation may partner directly with a licensed issuer for dealing and custody in segregated accounts, without going through an SFC-licensed platform; the virtual asset knowledge assessment is disapplied for stablecoin-only services; and such products are neither automatically complex nor restricted to professional investors. If your business model involves distributing stablecoins, this circular is the one to read.

Fund managers, dealers and advisers

Virtual asset exposure rarely takes a business outside the SFC's existing licensing perimeter. More often it adds conditions to a licence the business already needs.

A manager investing 10% or more of a portfolio's gross asset value in virtual assets requires a Type 9 licence with the SFC's virtual asset fund manager terms and conditions, which impose requirements on custody, risk management and investor disclosure. Below 10%, or where exposure is only indirect, the de minimis exemption applies and standard Type 9 requirements govern. The threshold is assessed portfolio by portfolio. Note that the incoming virtual asset management regime, discussed below, deliberately contains no de minimis threshold, so this 10% line will not survive in its current form.

Intermediaries distributing virtual asset products or providing dealing services need Type 1 with virtual asset conditions, and advisers need Type 4. The rule that dealing services must be provided through an SFC-licensed platform is no longer unqualified. A supplemental joint circular of 30 September 2025 permitted intermediaries to offer staking and confirmed that in-kind subscription and redemption of investment products using virtual assets is not virtual asset dealing. The February 2026 circulars then allowed client orders to be routed to shared order books operated by licensed platforms and their overseas affiliates, so execution is no longer confined to the Hong Kong order book. The May 2026 stablecoin circular adds the direct-with-issuer route described above.

Our guide to SFC licensing for asset managers and investment advisers covers the underlying licensing process these regimes build on.

What is coming, and why it matters more than usual

Hong Kong is completing its digital asset framework through amendments to the AMLO. Four new regimes are involved, not the two that earlier commentary refers to:

• Dealing in virtual assets, which is wider than the over-the-counter shops the 2024 consultation focused on, and covering brokers and digital platforms.
• Virtual asset custodian services.
• Virtual asset advisory services.
• Virtual asset management services, with no de minimis threshold.

The sequence was: consultations on dealing and custody launched on 27 June 2025; conclusions on those two published on 24 December 2025, alongside a further consultation on advisory and management; and conclusions on advisory and management published on 26 May 2026 after 51 responses. The Government stated its objective of introducing the bill into the Legislative Council within 2026. As at the date of this article no bill has been gazetted or introduced.

The practical point is the absence of a transitional arrangement. Under the 2023 exchange regime, pre-existing platforms could apply and keep operating on a deemed basis. The Government has confirmed that there will be no deeming arrangement this time. There will be a hard commencement date with some adjustment time, and an expedited route only for entities already regulated by the SFC. A business currently running an OTC desk, a custody service or a virtual asset advisory or management business in Hong Kong therefore needs to be application-ready before commencement, not after it.

How long an application takes

The SFC publishes no processing-time data for VATP applications and gives no performance pledge, so any specific figure should be treated with caution. What can be said is what the SFC's own published applicant list shows: applications pending anywhere from roughly fourteen months to over thirty months, with no guarantee of a grant at the end. Several applications filed in February 2024 remain outstanding.

Applicants should plan on that basis rather than on a marketing timetable. The work itself covers corporate structuring and capitalisation, recruitment and approval of responsible officers, the application bundle including business plans and compliance and AML policies, engagement of external assessors, responses to SFC requisitions, and the post-approval-in-principle assessment.

Where applications fail or stall, the reasons are usually the same three. Substance is thin, meaning the governance, personnel and systems do not genuinely sit in Hong Kong. The custody architecture cannot meet the cold storage, segregation and associated-entity requirements. Or the AML and CFT framework is a group template that has not been localised to Hong Kong's requirements, including the travel rule.

A note on tax

Licensing is not the only obligation arriving. Hong Kong is implementing the OECD Crypto-Asset Reporting Framework, with due diligence beginning on 1 January 2027 and the first automatic exchange of data in September 2028. The reporting perimeter is wider than the licensing perimeter, so a business outside the AMLO licensing regime can still be a reporting service provider. See our guide to CARF in Hong Kong.

A short checklist

• Map each of your activities against the regimes above. Most crypto businesses touch more than one.
• If you operate or plan to operate a trading platform, budget for dual licensing, a Hong Kong-incorporated and TCSP-licensed custody subsidiary, the twelve-month operating expense liquidity requirement, and external assessments.
• If you issue or plan to issue a stablecoin, work through the HK$25 million capital requirement, the reserve rules and the one-business-day redemption obligation before anything else. Then form a realistic view of your prospects given that only two licences have been granted.
• If you manage money, check the 10% threshold now, and plan for its removal under the incoming management regime.
• If you deal, advise or provide custody, treat licensing as imminent and assume no deeming period.
• Whatever your model, build the AML and CFT framework early. It is common to every regime and it is where applications most often come unstuck.
• Check your CARF position separately from your licensing position. They are different tests.

How we can help

Alan Wong LLP advises virtual asset businesses on Hong Kong licensing strategy, VATP and stablecoin licence applications, SFC licensing and virtual asset conditions, token characterisation, and readiness for the incoming dealing, custody, advisory and management regimes. If you are working out which licences your business needs, we can map your activities against the current and forthcoming regimes and give you a realistic view of scope, cost and timing. To discuss your position, please get in touch.

This article is general information current as at August 2026. Hong Kong's virtual asset regulation is changing quickly and the position may have moved since publication. It is not legal advice and should not be relied on as such.