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Hong Kong's mandatory VATP licensing regime under the SFC has been in force since June 2023 and now covers twelve licensed platforms (as of Feb 2026, following the Victory Fintech/VDX approval). A second wave of AMLO-based licensing proposals covering virtual asset dealing, custodial, advisory and management services is pre-enactment, targeted for 2026 LegCo introduction following a 190+ response consultation, with proposed capital-adequacy thresholds for the advisory/management track.
The more consequential development in this module is prospective rather than settled. The FSTB and SFC are targeting 2026 for the introduction to LegCo of legislative proposals establishing AMLO-based licensing regimes for virtual asset dealing and custodial services, following a public consultation that drew more than 190 responses. A parallel track targets a bill establishing AMLO-based licensing for virtual asset advisory and management services, following consultation conclusions published this cycle. Neither has yet been formally tabled, and both remain classified as proposed rather than enacted. The advisory/management track carries an emerging capital-adequacy architecture: baseline financial-resources requirements are proposed at HKD 100,000 minimum liquid capital for firms that do not hold client assets, rising to as much as HKD 5,000,000 in paid-up capital plus HKD 3,000,000 in liquid capital for firms that do hold client assets. These thresholds are themselves still proposed, not in force, and could be revised before any bill is tabled.
Read together, these two tracks represent a deliberate second wave of perimeter expansion beyond the existing VATP and stablecoin licensing regimes — extending statutory coverage to categories of virtual-asset intermediary (dealers, custodians, advisers, managers) that currently sit outside any dedicated Hong Kong licensing requirement. This sequencing mirrors a broader pattern in Hong Kong's approach: core, high-materiality activities (exchange trading, stablecoin issuance) are brought into force first, with secondary categories of intermediary activity following via a slower consultation-to-bill pipeline. For counterparties assessing Hong Kong risk, this matters: the presence of a mature core regime does not imply equivalent certainty for firms whose primary business lies in dealing, custody, advisory or management services falling outside the current VATP and stablecoin scope.
Outlook
The immediate open questions are procedural rather than substantive: whether the dealer/custodian bill and the advisory/management bill are in fact introduced to LegCo within 2026 as targeted, and what effective dates and final capital-requirement schedules they carry once tabled. Until introduction occurs, firms conducting dealing, custody, advisory or management activity involving virtual assets outside the current VATP and stablecoin perimeters continue to operate in a regulatory grey zone that the SFC and FSTB have signalled an intent, but not yet a binding requirement, to close. The pace of VATP registry growth — a single new licensee in the eight months to February 2026 — suggests the existing licensing pathway, while mandatory, is not attracting rapid new entry, a data point worth tracking alongside the second-wave legislative timeline as an indicator of overall market appetite for Hong Kong's licensed perimeter.
Crypto Licensing
Hong Kong's existing Virtual Asset Trading Platform licensing requirement, in force under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap.615) Part 5B and the Securities and Futures Ordinance (Cap.571) Part V since 1 June 2023, remains unchanged and settled this cycle. Against that stable backdrop, the SFC's own applicant register recorded the withdrawal of Flying Hippo Technologies Limited, operating as Matrixport HK, from the VATP applicant pool on 12 October 2026, with a required close-down of any unlicensed activity by 12 January 2027. The application had been pending since 26 February 2024, so the withdrawal removes a long-standing entrant from the licensing queue rather than reflecting a newly rejected application.
The more structurally significant movement is the continued progress of an AMLO amendment bill that would create standalone licensing for virtual asset dealing and virtual asset custody, expected to be introduced to the Legislative Council before the end of 2026. As reported, the bill would require HK$5 million in paid-up capital for virtual asset dealing activity and HK$10 million in paid-up capital for virtual asset custody activity. Critically, the reported design includes no deeming arrangement and no non-contravention period for firms currently conducting dealing or custody activity outside the existing VATP perimeter, meaning such firms would face a hard cut-over into the new licensed regime at commencement rather than a transitional compliance window. This finding is carried at probable confidence from a legal commentary source rather than the bill text itself, since the pinpoint statutory provision and exact commencement date are not yet available, the bill not having been published.
The SFC's standing enforcement framework for licensed VATPs and intermediaries remains unchanged: the maximum fine is the higher of HK$10 million or three times the profit gained or loss avoided, with reprimand and suspension or revocation of licence also available, under the SFC's standing disciplinary framework. This framework applied, separately, in the SFC's HK$7 million enforcement action against a licensed intermediary for due-diligence failures, though that action sits within the financial-integrity rather than crypto-licensing lens of this record.
Outlook
The central open question for Hong Kong's crypto licensing architecture is whether the AMLO amendment bill reaches LegCo introduction before the end of 2026 as currently targeted, and whether the reported absence of a deeming arrangement is retained in the bill as introduced. If retained, firms currently dealing in or custodying virtual assets outside the VATP perimeter would face a materially compressed compliance timeline once the new regime commences. The Matrixport HK withdrawal, read alongside this pending bill, is consistent with a jurisdiction progressively tightening its licensing perimeter across virtual-asset activity types, even as the existing VATP regime itself remains settled and unchanged.
1 earlier distinct update(s)
Crypto Licensing
Hong Kong's existing centralised virtual asset trading platform licensing requirement, administered by the Securities and Futures Commission under the Securities and Futures (Amendment) Ordinance 2022, has been in force since June 2023 and is unchanged this cycle. The material development is the reconfirmation, reported on 29 September 2026 and again via 5 October 2026 remarks to the Legislative Council Finance Committee, of a planned single amendment bill to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap.615) that would create licensing regimes for virtual-asset dealing, custody, advisory and management. The proposal, as currently described, carries no transitional deeming arrangement: firms engaged in these activities without a licence once the regime commences would be required to cease the activity rather than operate under a grandfathered status.
Secondary commentary ahead of the bill's text has floated an administrative fine of up to HK$5 million for unlicensed activity under the proposed regime, and a standalone VA custody framework carrying minimum paid-up capital of HK$10 million and minimum liquid capital of HK$3 million, together with internal-control and insurance arrangements. None of these figures appears in a gazetted instrument as of this cycle, and the bill itself has not been introduced to the Legislative Council. The absence of a deeming arrangement is a notable design choice relative to some other jurisdictions' VASP transition regimes, and it means existing unlicensed providers of dealing, custody, advisory or management services face a binary cliff-edge once the regime takes effect rather than a phased compliance runway.
Outlook
The principal question for this module is whether the bill is gazetted and introduced to LegCo within the reconfirmed end-2026 target, and whether the final text retains the no-deeming design and the consultation-stage capital and penalty figures currently circulating only in secondary commentary.
Sources and findings (5)
- T4 · The BlockSFC virtual asset trading platform (VATP) regime — Mandatory licensing regime for virtual asset trading platforms (VATPs), allowing licensed exchanges to offer retail trading services, launched June 2023.retrieved M5bindingin force
- T3 · CoinDeskSFC VATP register — 12 licensed VATP platforms as of February 2026, following approval of Victory Fintech (VDX) — the first new licensee since June 2025.retrieved M2non-bindingupdated
- T3 · CoinDeskFSTB/SFC virtual asset dealing & custodial services licensing proposal — Introduction of legislative proposals to LegCo in 2026 establishing AMLO-based licensing for virtual asset dealing and custodial services, following a public consultation (190+ responses).retrieved M4bindingproposednew
- T4 · The BlockFSTB/SFC virtual asset advisory & management services licensing proposal — Introduction of a bill to LegCo in 2026 establishing AMLO-based licensing regimes for virtual asset advisory and management services.retrieved M4bindingproposednew
- T4 · The BlockProposed virtual asset advisory/management licensing regime — Baseline financial resources requirements: HKD 100,000 minimum liquid capital for firms not holding client assets; up to HKD 5,000,000 paid-up capital plus HKD 3,000,000 liquid capital where client assets are held.retrieved M3bindingproposednew