Hong Kong Pushes New Licensing Regime for Crypto Advisory, Asset Management

Hong Kong authorities are moving to introduce a new licensing regime for virtual-asset advisory and management services, extending formal oversight beyond crypto trading and custody.

Crypto-focused media outlet BlockBeats reported on May 26 that Hong Kong’s Financial Services and the Treasury Bureau and the Securities and Futures Commission released the results of a public consultation on a regulatory framework for virtual-asset advisory and management services.

The authorities said proposals to license virtual-asset advisory and management services won broad market support during the consultation period. The framework targets firms that provide investment advice on virtual assets or manage virtual-asset portfolios.

The new regime will follow the principle of “same business, same risks, same rules,” according to the authorities. Under that approach, the scope of virtual-asset advisory services will be aligned with Type 4 regulated activity under Hong Kong’s Securities and Futures Ordinance, which covers advising on securities.

Virtual-asset management services will be designed in line with Type 9 regulated activity covering asset management services. That means firms performing investment-advisory and portfolio-management functions would be subject to the same level of regulation as traditional financial-service providers, even if the underlying asset is a virtual asset.

Hong Kong has already been advancing licensing systems for virtual-asset trading and custody services. Adding advisory and management rules would bring the market’s main functions — trading, custody, advice and management — into the supervisory framework.

The authorities said the new measures would help increase participation in Hong Kong’s digital-asset market while contributing to a more robust and secure ecosystem. The effort also ties into the Securities and Futures Commission’s ASPIRe roadmap.

The market views the move as another step in strengthening Hong Kong’s strategy to become a virtual-asset hub. Extending the regulatory framework beyond exchange licensing to asset management and investment advice could improve conditions for institutional investors and professional managers to enter the market.